The American pastor jailed in Turkey on espionage and terrorism-related charges was praised by President Trump on Thursday who called him "a great patriot hostage" - and said the USA would "pay nothing for the release of an innocent man".
The Turkish lira stood at 5.80 per dollar on Friday, up about 0.4 percent against the dollar.
Pastor Andrew Brunson, a USA citizen who has resided in Turkey for over two decades, was arrested on terrorism and espionage charges as part of the Erdogan government's probe into 2016's failed military coup.
He said early on Friday that Turkey had "taken advantage of the United States for many years" and that he was "cutting back on Turkey".
The White House on Wednesday condemned Turkey's doubling of tariffs on U.S. cars, alcohol and tobacco imports, calling the action "a step in the wrong direction".
Still, many investors remain on edge about the situation in Turkey and other emerging markets amid a strengthening US dollar and rising interest rates.
Bilateral ties have spiraled into a full-blown crisis over the trial of Andrew Brunson, a Christian pastor, who is accused of having links with perpetrators of a failed military coup against Erdogan in 2016.
Asian shares gain on US-China trade talks, lira recovers
Brent crude oil futures fetched US$71.36 a barrel, down 0.1 percent in Asia on Friday after a 0.69 percent rise the previous day. The euro declined to $1.1330, the lowest since July 2017, before edging to $1.13335, down almost 0.7 percent on the day.
The US has threatened to impose more economic sanctions on Turkey if it does not free a detained American pastor.
In return, President Recep Tayyip Erdogan signed a decree to raise tariffs on American imports including cars, alcohol and tobacco.
"We got somebody out for him", Trump said.
Analysts say Turkey is also likely to seek a more dynamic economic relationship with China and Russian Federation, with whom ties have warmed considerably in recent years. The U.S. Department of Treasury sanctioned Turkey's Minister of Justice Abdulhamit Gul and Minister of Interior Suleyman Soylu in early August over their roles in Brunson's detention.
The threat comes as Turkey sought to reassure investors rattled by the sanctions-fueled crash of the Turkish lira, insisting the country would emerge stronger.
Vice President Fuat Oktay tweeted that the new tariffs were retaliation for "the deliberate attack of the US administration on our economy", CNN said.
"Turkey isn't in favor of an economic war", Ibrahim Kalin said Wednesday, "but staying silent when attacked is out of question".