"To President Erdogan and the Turkish government, I have a message on behalf of the president of the United States of America: Release pastor Andrew Brunson now, or be prepared to face the consequences", Vice President Mike Pence said last month.
The Turkish lira hit a record low of 7.24 to the dollar this week, down 40 percent this year, as investors fretted over Erdogan's influence over monetary policy and the dispute with the United States. "It's fairly clear that the Fed is nearly certain to hike in September and very likely to hike in December again, whereas other central banks are maintaining a status quo".
The Turkish currency began to recover after authorities this week took steps to help bank liquidity.
Despite the political tensions, the lira rebounded some 6 percent on Wednesday, strengthening to around 6.0 to the dollar.
The dispute with North Atlantic Treaty Organisation partner the United States, focused on a tit-for-tat tariff row and Turkey's detention of Brunson, helped turn the currency's steady decline into meltdown.
"Qatar has pledged $15 billion of direct investments in Turkey", tweeted Ibrahim Kalin after President Recep Tayyip Erdogan met with Sheikh Tamim bin Hamad al-Thani, Qatar's emir, in the capital Ankara.
Commenting on the move, the U.S. leader said: "I have just authorised a doubling of tariffs on steel and aluminium with respect to Turkey as their currency, the Turkish lira, slides rapidly downwards against our very strong dollar".
White House press secretary Sarah Huckabee Sanders earlier criticised Turkey's move to impose tariffs on some United States goods as "regrettable and a step in the wrong direction". Furthermore, President Trump said, "Turkey hasn't turned out to be a great friend". But the White House does not plan to lift the metals tariffs, which Sanders said were a national security issue.
Administration officials said the USA doesn't now have any meetings scheduled with Turkish officials to discuss Brunson's case.
Turkey hikes tariffs on imports of several USA products
Sanders said Brunson's release would not lead to an easing in the tariffs, but that it could lead to an easing in sanctions. Erdogan has blamed the US for the fall of the lira, but refused to budge on Trump's demand for Brunson's release.
Analysts question the effectiveness of any Turkish boycott of us goods and view Turkey's tit-for-tat taxes - imposed Wednesday on American exports, including cars, tobacco and alcohol - as mostly symbolic because they have relatively little value to a global trade giant engaged in similar disputes with China and other major economies.
The Turkish currency was trading at 5.85 at 1740 GMT, more than 1 percent stronger on the day. Cavusoglu said ties with the bloc, which have been strained in recent years, were on a firmer basis and had started normalising.
The administration's move to impose import tariffs on China, Europe, Mexico and Canada is also expected to contribute to inflation, which tends to ramp up bets on a swifter pace of Fed rate hikes and, in turn, a stronger dollar.
"You work with us in Afghanistan, Somalia and North Atlantic Treaty Organisation, and then you go stab your partner in the back", he said earlier this week.
"So now you have economic data warranting the Fed rate hiking cycle and expectations for other central banks pushed out a little bit", said Tomes.
It was also helped by a step from the banking watchdog BDDK, cutting the limit for Turkish banks' forex swap, spot and forward transactions with foreign banks to 25 per cent of a bank's equity.
Washington later said it was ready to impose further economic sanctions on Turkey.
Finance Minister Berat Albayrak assured global investors on Thursday that Turkey would emerge stronger from its currency crisis, insisting that the country's banks were healthy.
Albayrak said that support offered to Turkey proved promising for positive relations with the EU.