Both the White House and State Department continued to express an uncompromising position toward Turkey on Tuesday, demanding that Ankara release US Pastor Andrew Brunson, whom it detained in October 2016, following July's abortive coup attempt.
While the Brunson matter appeared far from being resolved, Turkish President Tayyip Erdogan got a shot in the arm from Qatar's Emir, who approved a package of economic projects, investments and deposits after the two met in Ankara.
Only weeks ago it would have seemed fanciful to draw a link between the fate of an American pastor in Turkey, a crisis between two North Atlantic Treaty Organisation allies and turmoil on global financial markets.
The political spat with Washington has added to pressure on Turkey's currency, the lira, which has plunged against the dollar.
Turkey's national currency, the lira, has tumbled by almost 40% against the U.S. dollar so far this year.
A Turkish court on Wednesday rejected a new appeal to free USA pastor Andrew Brunson, whose detention has sparked a severe crisis in relations between Turkey and the United States, local media reported. The Turkish lira sank to a fresh to low of 7.24 to the dollar in early Asia Pacific trade last Monday.
Only one United States measure directly affects Turkey's economy: Trump's decision to increase tariffs on the import of Turkish steel and aluminum.
Mr Trump reportedly believed he had reached agreement with Erdogan to free Brunson in exchange for Israel's release of a Turkish woman, Ebru Ozakan, accused of providing funds to Hamas.
In June, credit rating agency Moody's said it would place Turkey's credit rating on review for a downgrade, citing the uncertainty around the future direction of its macroeconomic policies.
On Sunday, Turkish President Recep Tayyip Erdogan said he would like to form "a new alliance" with China, Iran and Russian Federation to resist economic pressures imposed by the Donald Trump administration.
The evangelical pastor is accused of terrorism charges and aiding the network of a US -based Islamic preacher blamed by Ankara for masterminding a coup attempt in July 2016 against Turkish President Tayyip Erdogan.
The diplomatic dispute has sent shockwaves through financial markets across the world as the plunging lira causing currencies in other developing countries to nosedive.
The lira was trading on Wednesday at 6.02 to the dollar, a gain in value on the day of 5.5 percent.
Also helping was Turkey's decision to release two Greek soldiers from prison on Tuesday, increasing prospects for improved relations with the European Union. Cavusoglu said ties with the bloc, long strained, were on a firmer basis and had started normalising.
The lira 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 percent of a bank's equity.
But many analysts say the only way for the authorities to show they are really serious about tackling Turkey´s economic problems - which include inflation approaching some 16 percent - would be a sharp rate hike.
"Rates have gone up by 10 percent". "They are killing offshore lira liquidity to stop foreigners shorting the lira", he said.
The lira on Tuesday rebounded about 8 percent, helped by news of a planned conference call today in which Turkish Minister of Finance Berat Albayrak is to seek to reassure global investors.