USD/TRY hits fresh record highs as Russian warns Ankara

• Turkish lira remains under pressure on clashes at the disputed territory of Nagorno-Karabakh.
• USD/TRY heads for another record close, eyes 8.00.

The Turkish lira dropped to a new record low after Russia said to Turkey to contribute to end, and not to fuel, the current clashes over the disputed territory of Nagorno-Karabakh between Armenia and Azerbaijan.

The USD/TRY climbed to 7.8591, the new all-time high and as of writing, it trades at 7.8401, up 0.46% for the day and up 2.30% from the level it had a week ago.

The pressure on the currency continues to grow amid geopolitical concerns. Last week, the Turkish’s central bank was forced to raise interest rates in order to support the currency. The geopolitical conflict, now with the involvement of Russia, is another negative factor for the currency.

If the situation worsens the USD/TRY could climb to 8.00 and even more, triggering more concerns. Emerging market assets could be hit if the decline of the lira accelerates.