Trump's latest boost to the dollar: U.S.-Turkey spat

Randal Sanchez
August 17, 2018

Turkey's Foreign Minister Mevlut Cavusoglu on Thursday reiterated his criticism of US's current political stance against Turkey.

The official says Turkey missed a big opportunity to bring about an end to the tensions over Brunson's imprisonment, which has sparked USA economic sanctions on Turkey.

An Istanbul court allowed the release of Amnesty International's Turkey chair Taner Kilic Wednesday, who spent more than a year in jail over alleged links to the 2016 coup bid.

Trump later said in a tweet the United States "will pay nothing" for Brunson's release, "but we are cutting back on Turkey!"

On Wednesday, a court rejected an appeal for Mr Brunson's release from detention and for a travel ban against him to be lifted, the state-run Anadolu Agency reported.

The currency plunged to a record low of 7.24 per dollar at the start of the week as a worsening of relations between Turkey and the United States added to losses driven by concerns over President Tayyip Erdogan's influence over monetary policy.

Trump said the United States had helped Turkey in a related incident, but that the North Atlantic Treaty Organisation ally had not repaid the favor.

Sanders responded that "the tariffs from Turkey are certainly regrettable and a step in the wrong direction", adding "certainly we don't support Turkey's decision to retaliate against us protecting our national security interests".

The currency strengthened some 2 percent against the dollar, trading at around 5.85 per dollar, hours before Treasury and Finance Minister Berat Albayrak was scheduled to update global investors about the economy.

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However, the central bank has defied calls from markets for rate hikes, raising concerns of interference from Mr Erdogan who is on record as describing himself as an "enemy" of higher interest rates.

Some Turks have been responding to their president's call to boycott USA electronic goods by posting videos in which they smash iPhones with bats, hammers, and other blunt instruments. Turkey had previously said it would boycott United States electronic products.

Investors, already anxious about Turkey's economy, were irked by a diplomatic and trade dispute with the United States over the continued detention of an American pastor Andrew Brunson on espionage and terror-related charges.

Turkish police have arrested another German citizen, Reuters reported on Thursday, citing a German Foreign Ministry source. "We're aware of the case".

United Kingdom -based online travel agent Travel Republic says bookings to Turkey increased by 21 percent in the last three days.

The officials said Qatar's Sheikh Tamin bin Hamad Al Thani pledged to "quickly implement" the investment package during a meeting with Mr Erdogan in Ankara.

MSCI's broadest index of Asia-Pacific shares outside Japan was up 0.4%, a day after it hit its lowest level in a year.

JP Morgan said moves by Turkish authorities showed they were committed to stabilising the currency with technical measures such as restricting forex swaps and cancelling repo auctions to push up the weighted average cost of funding.

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