Investing.com - The Turkish lira rallied on Tuesday, as the currency found its footing following two days of intense selling after the country's central bank pledged to provide liquidity in response to a meltdown which has unsettled global markets.
The lira rose by as much as 8% to 6.4172 against the dollar, before pulling back slightly to 6.4250, still up 6.7% for the day (USD/TRY).
Investors were also comforted by news that Finance Minister Berat Albayrak would hold a conference call with investors from the U.S., Europe and the Middle East on Thursday, his first since assuming the post almost two months ago.
The struggling currency sank to an all-time low of 7.1289 on Monday amid growing concern over a deepening diplomatic rift with the United States over Ankara's detention of Andrew Brunson, an American pastor detained in 2016.
Turkish authorities accuse Brunson of supporting a failed coup attempt earlier that year.
Worries about President Tayyip Erdogan's growing influence over the economy, and his reluctance to raise interest rates despite rising inflation have also weighed on the lira, which is down almost 70% this year.
Other emerging market currencies also enjoyed a bounce, with South Africa’s rand and Russia’s ruble trading higher.
Meanwhile, the euro inched up 0.1% against the dollar to 1.1420, having fallen to a 13-month low of 1.1365 on Monday.
The drop in the euro came amid worries that Turkey's economic woes could hit European banks.
Elsewhere, the U.S. dollar index, which measures the greenback’s strength against a basket of six major currencies, was down 0.1% to 96.06, after climbing to a 13-month high of 96.39 on Monday.
The yen was lower against the dollar, with USD/JPY rising 0.4% to trade at 111.10, off a 1-1/2-month low of 110.10 touched on Monday.