Lira resumes fall after Trump threats

U.S. President Donald Trump on Friday said the United States was not going to take Turkey's detention of U.S. Christian pastor Andrew Brunson "sitting down", a day after his Treasury chief said Washington could hit Ankara with further sanctions.

Turkey, meanwhile, is frustrated by the refusal of the extradite a Pennsylvania-based Muslim cleric accused by Turkish authorities of engineering the coup attempt.

The embattled lira fell three percent yesterday after a Turkish court rejected a USA pastor's appeal for release, drawing a stiff rebuke from Mr Trump, who warned the U.S. would not take the detention of Andrew Brunson "sitting down". "The Europeans will maintain the existing objections to certain Erdogan policies and continue to voice their concerns, but that won't stop them from developing pragmatic cooperation with Turkey", he said.

President Donald Trump criticized Turkey on Friday, saying the North Atlantic Treaty Organisation ally is not a friend to the US and had made up espionage charges against an American pastor detained in the country. Gulen has denied the charges, and the USA has rejected every request to force him from his compound in Pennsylvania to stand trial in Turkey.

The White House called the Turkish response a step in the wrong direction and signalled a hard line on Brunson's release.

"Some people threaten us with economy, sanctions, foreign currency exchange rates, interest rates and inflation".

Trump's comments came after a court in Izmir province rejected an appeal to release Brunson from house arrest, saying evidence was still being collected and the pastor posed a flight risk, according to a copy of the court ruling seen by Reuters.

A decree by Mr Erdogan doubled Turkish tariffs on imports of United States passenger cars to 120 per cent, alcoholic drinks to 140 per cent and leaf tobacco to 60 per cent. Tariffs were also doubled on goods such as cosmetics, rice and coal. "Would the amount of Turkey's debts decrease?"

Investors are concerned that Turkey's has amassed high levels of foreign debt to fuel growth in recent years, and as the currency drops, that debt becomes more expensive to repay, leading to potential bankruptcies.

Turkish President Recep Tayyip Erdogan has bristled at such USA pressure.

Turkey, in turn, criticized the prosecution in the USA of Mehmet Hakan Atilla, a top official at Turkey's state-controlled Halkbank who was convicted of helping Iran avoid US sanctions.

Despite the political tensions, the lira rebounded some 6 percent on Wednesday, strengthening to around 6.0 to the United States dollar.

Mr Trump later said in a tweet that the U.S. "will pay nothing" for Brunson's release, "but we are cutting back on Turkey!" They are now holding our wonderful Christian Pastor, who I must now ask to represent our Country as a great patriot hostage.

If the evangelical pastor is found guilty, he will face up to 35 years in jail.