The currency's climb followed retaliatory tariffs by Ankara against USA goods including rice, coal and cars.
Turkey sought to face down the U.S. and currency traders as its president, Recep Tayyip Erdoğan, reportedly received support from the German chancellor, Angela Merkel. Tariffs on U.S. cars have doubled to 120 percent while tariffs on alcoholic beverages doubled to 140 percent. "If they back the American position on Turkey tariff penalties, then they lose Turkey".
A financial crisis that began in 1997 after Thailand devalued its currency eventually sent markets reeling across the region in what became known as the Asian financial crisis.
The currency has lost almost 40 per cent against the dollar this year, impacted by Mr Erdogan's growing influence on the economy and his repeated calls for lower interest rates despite high inflation.
Turkey has borrowed much more in foreign currencies than any other country, as a percentage of its economy, and investors question how much authority its central bank has to raise interest rates. The currency picked up 6 percent and strengthened briefly at just under 6 to the dollar.
Against this backdrop, the nation's banking regulator said late Tuesday that lenders can now extend maturities on or refinance loans, issue new debt to help troubled companies, and seek new collateral to protect themselves.
Brunson is at the center of a diplomatic spat between North Atlantic Treaty Organisation allies Turkey and the United States, which has helped trigger a Turkish currency crisis.
The United States had a trade surplus with Turkey in 2017 of almost $330M.
Sanders, however, said the American pastor's potential release would not lead to an easing in the tariffs; rather, she said, it could lead to an easing of sanctions on Ankara.
Erdogan has rejected Washington's demands to release him, while announcing new tariffs on US imports.
It usually takes a court between 3 to 7 days to process an appeal but a ruling could come sooner in this case, Brunson's lawyer Ismail Cem Halavurt told Reuters.
Washington warned more economic pressures may be in store for Turkey if it refuses to release Brunson, a White House official said yesterday.
The White House on Wednesday condemned Turkey's move tariffs, calling the action "a step in the wrong direction".
Turkey should commit to sound economic policies to promote stability and reduce imbalances at a time of market volatility, an International Monetary Fund (IMF) spokesperson said on Wednesday as a row between Washington and Ankara over the jailing of an American pastor dragged on.
"Turkey does not favour an economic war, but it can not remain unresponsive when it is attacked", said Ibrahim Kalin, a spokesperson for President Recep Tayyip Erdogan.
Underscoring the ties between the countries, Sheikh Tamim was the first foreign leader to phone President Erdogan during the failed coup in Turkey in 2016.
The local court in Izmir rejected Brunson's appeal to be released while his trial is pending.
"They are squeezing lira liquidity out of the system now and pushing interest rates higher", said Cristian Maggio, head of emerging markets strategy at TD Securities.