The Turkish lira snapped a three-day rebound and succumbed to selling pressure, sliding 5 percent to 6.1051 per dollar as investors fretted about the threat of more US economic sanctions unless it hands over detained American evangelical pastor Andrew Brunson.
Erdogan responded on Tuesday by announcing a boycott of American electronics after Trump's decision to hike tariffs.
Ebbing concerns over the fallout from the Turkish lira's recent slide also helped strengthen the euro against the dollar.
"There has been no sign that the central bank will be allowed to raise interest rates significantly and return rates to positive territory", said William Jackson of Capital Economics in a note to clients.
It has lost almost 40 per cent of its value against the dollar this year, hit by both the diplomatic rift and investor alarm about President Tayyip Erdogan's influence over monetary policy.
In retaliation, Turkey on Wednesday imposed tariffs on certain USA goods.
Dashing hopes for a quick solution to the dispute, a Turkish court on Friday rejected an appeal for the evangelical pastor's release from house detention.
The United States has already imposed sanctions on two Turkish government ministers and doubled tariffs on Turkish steel and aluminum imports.
Unhealthy levels of chemicals present in cereals, report says
The lowest level, 10 parts per billion , came from a sample of Whole Foods conventional rolled oats scooped from a bulk bin. In 2015, the International Agency For Research On Cancer classified glyphosate as " probably carcinogenic to humans ".
U.S., China to Resume Trade Talks as Tariffs Bite
News of the meeting boosted the Chinese yuan and helped cap losses in China's stock markets.[CNY/][.SS]. And China has promptly hit back with tariffs on an equal amount of USA exports.
Trump attacks Turkey, vows to pay "nothing" for United States pastor's release
A Trump tweet on Friday announcing a doubling of aluminum and steel tariffs for Turkey triggered the rout in the currency markets. He says the USA will pay nothing for his return, because he is innocent and indicated the pressure on Turkey will continue.
On the currency front, the USA dollar is trading at 110.40 yen compared to the 110.90 yen it fetched at the close of NY trading on Thursday.
As the row deepens, Turkey has reached out to European allies and spoken of improving strained ties with the bloc.
The currency has recovered from record lows earlier this week.
"When anyone faces any charges, regardless of the person's citizenship, that person will have to go through the judicial process", he said.
"Rates have gone up by 10 per cent".
Mr Albayrak said Turkey's banks are "healthy and strong" and that implementing structural reforms and maintain tight monetary policy to fight inflation remain a priority. Turkish companies need to pay close to 5.80 lire for each US$1 of debt that they owe, for example, up from 3.79 lire at the start of the year.
Finance Minister Berat Albayrak, Erdogan s son-in-law, was due to address hundreds of foreign investors through a tele-conference on Thursday, in an apparent attempt to reassure the markets. "And Turkey has in my opinion acted very very badly".
There was no resolution to the Brunson case in sight. Brunson is now on trial and held on house arrest, with few indications that Turkish officials intend to comply with the demands - despite the bullying attempt with US sanctions that were leveled against them two weeks ago. An upper court had yet to rule on the appeal, his lawyer told Reuters.
Supporters of Brunson, who ran a small church in the Turkish coastal city of Izmir, say allegations that he was linked to Kurdish rebels as well as Turkish cleric and alleged coup plotter Fethullah Gulen are absurd.