The Turkish lira came under fresh pressure on Thursday as the US warned that new sanctions would be imposed on Turkey if a detained American evangelical pastor was not released.
The embattled currency had been steadily strengthening in recent days after steps to clamp down on short selling and reassurances from the government that it would not impose capital controls.
But it reversed much of the day’s gains after Steven Mnuchin, US Treasury secretary, said Washington had prepared further measures against Ankara. The Trump administration has already imposed sanctions on two Turkish ministers and increased tariffs on Turkish steel and aluminium imports.