Turkish lira slumps to new record low as Donald Trump doubles tariffs

Erdogan warns of campaign against Turkey as lira plummets

Erdogan warns of campaign against Turkey as lira plummets

The dollar rose as exposure to Turkey could impact European banks and spark a domino effect as people begin to pull out of those banks and into USA assets, said Gregan Anderson, macroeconomic strategist at brokerage Bulltick LLC.

Last week, he called on Turks to convert their foreign currency and gold into Turkish lira to help the currency.

Turkish President Recep Tayyip Erdogan is appealing for calm as the country's currency plunges, urging people to change foreign money into local lira.

"If you have dollars, euros or gold under your pillow, go to banks to exchange them for Turkish lira".

Trump said he had authorized higher tariffs on imports from Turkey, imposing a 20 percent duty on aluminum and 50 percent one on steel.

The situation was compounded on Friday when US President Donald Trump tweeted that he had authorised a doubling of tariffs on steel and aluminium. The S&P 500 lost 20.3 points, or 0.71 percent, to 2,833.28 and the Nasdaq Composite dropped 52.67 points, or 0.67 percent, to 7,839.11.

The mere fact that the USA would impose sanctions on Turkey - a stalwart North Atlantic Treaty Organisation ally for decades during the Cold War - has increased uncertainty about the future in Turkey.

The President announced the stiff tariffs on social media Friday morning, saying he was "authorizing a doubling of tariffs on steel and aluminum with respect to Turkey".

White House spokeswoman Lindsay Walters later clarified, "As he stated, the president has authorized the preparation of documents to raise tariffs on imports of steel and aluminum from Turkey".

Turkey has defied the United States on several fronts.

It comes as Turkey and the United States have squared up over Ankara's detention of U.S. paster Andrew Brunson on terror charges and other issues.

Ankara blames for an attempted coup in 2016.

Investors are now awaiting the release of the US consumer price inflation for July for clues on the interest rate outlook and to gauge if new import tariffs were starting to have an impact. The Trump administration has significantly upped the pressure in the last two months to secure his release.

Just weeks ago, Trump was reported to have fist-bumped Erdogan during a North Atlantic Treaty Organisation meeting in Brussels. Trump, who had secured the release of a Turkish woman activist being held by Israel and just days earlier he had been exchanging fist bumps with Erdogan at a North Atlantic Treaty Organisation summit in Brussels, took it as a personal affront.

"We are in uncharted waters here".

Turkish Deputy Foreign Minister Sedat Onal (2nd-L) leaves after a meeting with U.S. Deputy Secretary of State John Sullivan at State Department in Washington, U.S., August 8, 2018, without reaching an agreement. Trade issues and differences over Syria have also strained bilateral ties.

Lapid said it "would not hurt the Netanyahu government" to also take action against Turkey, presumably due to Erdogan's increasingly venomous statements against the Jewish state.

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