The lira tumbled about 10 per cent on Friday to another record low as investors worry about Erdogan's unorthodox economic policies and USA sanctions.
On Friday the currency dropped as much as 18 percent at onepoint, the biggest one-day fall since a 2001 financial crisis inTurkey.
The dollar rose as exposure to Turkey could impact European banks and spark a domino effect throughout Europe as people begin to pull out of those banks and into the USA, said Gregan Anderson, macroeconomic strategist at brokerage Bulltick LLC.
The decline has also hit European stocks today, with the Stoxx Europe 600 falling three per cent earlier on today.
The reaction from global currency markets caused the euro to slump to a 13-month low and pushed the dollar to a one-year high.
"As he stated, the President has authorized the preparation of documents to raise tariffs on imports of steel and aluminum from Turkey".
The lira fell as much as 18 per cent against the US dollar in its worst day since Turkey's financial crisis of 2001. Trump's public announcement of tariffs will only fan Erdogan's economic warfare narrative, which puts the source of Turkey's economic woes outside its borders. Financial upheaval there risks further destabilizing an already volatile region.
Turkey is now under a 25 percent tariff on imported steel and 10 percent on aluminum, which went into effect in March. "Section 232 tariffs are imposed on imports from particular countries whose exports threaten to impair national security as defined in Section 232, independent of negotiations on trade or any other matter".
"Officials are reportedly preparing stimulus measures in a bid to prop up growth, but these would simply exacerbate Turkey's economic vulnerabilities and could ultimately tip the country into a full-blown crisis, " Capital Economics said in a commentary.
Ivo Daalder, a former U.S. ambassador to North Atlantic Treaty Organisation and now president of the Chicago Council on Global Affairs think-tank, said Turkey could grind decision-making at Nato's headquarters in Brussels to a halt if the dispute with Trump got out of hand. Erdogan has frequently blamed an "interest rate lobby" and Western credit ratings agencies for trying to bring down Turkey's economy. U.S. President Donald Trump introduced a round of sanctions on August 1, preventing the Turkish justice an interior ministries from doing business with U.S. businesses.
That indicates that people are buying dollars and euros, not selling them off - and that they're not finding buyers in lira, anyway. He added that the country will continue to enjoy good economic relations with several major nations. This is a national struggle.
One economically-illiterate leader is crippling his own economy and blaming everyone else for it, which then turned out to be partially correct when another economically-illiterate leader made a decision to cripple their economy as payback for what they have done to themselves. Turkey wants Brunson to stand trial. Gulen has denied the allegation.
Presenting the government's new economic model, he said the next steps of rebalancing would entail lowering the current account deficit and improving trust.
Turkey's sovereign dollar-denominated bonds tumbled with many issues trading at record lows.
Turkey's treasury and finance minister Berat Albayrak - who is Mr Erdogan's son-in-law - tried to ease investor concerns during a conference, saying the government would safeguard the independence of the central bank. The central bank noted that Spain's BBVA, Italy's UniCredit and France's BNP Paribas all have significant exposure to Turkish debt and that a crashing lira could affect repayment of foreign currency loans.
Legal abortion bill rejected in Argentina
The lower house of Congress had already passed the measure and President Mauricio Macri had said that he would sign it. Uruguay and Cuba are the only two countries in Latin America to have decriminalised abortion.
Gaza rocket hits near southern Israeli city in show of defiance
The Israeli military said seven people were wounded by Palestinian rockets and mortars that hit southern Israel across the border. Palestinians look at damage at the site of an Israeli air strike in Al-Mughraqa on the outskirts of Gaza City, Aug. 9, 2018.