Turkey currency crashes as Trump doubles metals tariffs

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After inconclusive talks this week on solving the spat, Mr Trump took advantage of Turkey's turmoil to turn the screws on the country.

FILE PHOTO: A money changer counts Turkish lira bills at an currency exchange office in central Istanbul, Turkey, August 21, 2015.

Turkish President Recep Tayyip Erdogan has lashed out against a shadowy worldwide "interest rate lobby" which he suggested was "campaigning" to harm Turkey's economy, after the lira fell more than 14 percent overnight.

'If there is anyone who has dollars or gold under their pillows, they should go exchange it for liras at our banks.

Waves from the crisis spread overseas, with investors selling off shares in European banks with large exposure to the Turkish economy.

A diplomatic tussle between the U.S. and its North Atlantic Treaty Organisation ally deepened Friday after President Donald Trump said he had authorized the doubling of tariffs on Turkish steel and aluminum. Trump said in an early morning post on Twitter.

The tensions with Washington have, for investors, underscored Turkey's authoritarian trajectory under Erdogan. 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.

Concerns were amplified Friday by a report in the Financial Times that the supervisory wing of the European Central Bank (ECB) had over the last week begun to look more closely at eurozone lenders' exposure to Turkey. The president launched his steel and aluminum tariffs on the grounds that maintaining a robust domestic metal industry was a core national-security interest of the United States, and that competition with metal imports was threatening to drive said industry into extinction.

The US on August 1 imposed financial sanctions on its North Atlantic Treaty Organisation ally, blocking Turkey's ministers of justice and interior from doing business with Americans.

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U.S. President Donald Trump waves after exiting Air Force One to board Marine One after returning from OH on his way to Bedminster, NJ, at the Morristown Airport in Morristown, NJ, U.S., August 4, 2018.

Unfortunately, this still isn't a good reason for Trump's latest trade action - because it is an illegal one. Two days later, Secretary of State Mike Pompeo warned that Turkey that the "clock had run out" to release Brunson.

Just weeks ago, Trump was reported to have fist-bumped Erdogan during a North Atlantic Treaty Organisation meeting in Brussels.

Despite that move by Washington, Brunson has yet to be released.

"We are in uncharted waters here".

High-level meetings in Washington between US and Turkish officials over Brunson ended this week, apparently without a resolution. Trade issues and differences over Syria have also strained bilateral ties.

Turkish President Recep Tayyip Erdogan said in a speech that the drop was part of a "campaign" led by foreign powers. Gulen denies the allegation.

Turkey's energy minister announced on August 8 that Turkey will keep buying liquid natural gas from Iran in violation of US sanctions.

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