Turkish lira was sitting close to record lows against the dollar as Ankara and Washington each cancelled visa services for the other in a deepening diplomatic row.
The greenback also soared more than six percent to 3.8533 lira at one point before easing slightly as Ankara and Washington traded barbs over the arrest of a local staffer at the US embassy in Turkey.
“This latest escalation adds more fuel to the fire after tension was nearing a boil… over US support for Syrian Kurdish militants in the war against ISIS,” said Stephen Innes, head of Asia-Pacific trading at Oanda. Turkey views the Kurdish militants as a terrorist group.
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