USD/TRY jumps to weekly tops near 5.8750 on Turkish politics

• Turkish political woes, Erdogan’s vow send USD/TRY through the roof.
• Put value has hit lowest since July 3 ahead of the CBRT rate decision.

The USD/TRY pair jumped more-than-three percent on Tuesday after the Turkish Lira slumped on Reuters headlines, citing that the Turkish Nationalists say that they will pull out of the alliance with President Erdogan's AKP for the next elections.

Meanwhile, the NY Times reported that the Turkish President Erdogan that he would have a meeting with members of his Parliament on Tuesday to go over the details of the journalist Jamal Khashoggi’s killing at the Saudi Consulate in Istanbul.

However, the rally appears short-lived and the TRY could recover the losses, as “the sharp slide in the value of put options indicates that confidence in TRY has likely been restored. After all, the central bank had delivered a loaded hike of 625 basis points in September, possibly easing investor concern over Erdogan's influence on monetary policy,” Omkar Godbole, FXStreet’s Analyst noted.