The Turkish lira has strengthened more than 3% today, ahead of a presentation by Finance Minister Berat Albayrak to investors, shrugging off US comments ruling out the removal of steel tariffs on Turkey even if it frees a US pastor.
The currency gained some support from the announcement late yesterday of a Qatari pledge to invest $15 billion in Turkey.
The lira, still down 34% against the dollar this year, firmed to 5.7700 by 12pm Irish time from a close of 5.95.
Other Turkish markets were less buoyant: the main share index dipped 1.4% and the 10-year benchmark bond yield rose to 21.37% from 21.02%.
After hitting a record low of 7.24 this week, the lira has benefited from central bank steps to underpin a currency hit by concerns at President Tayyip Erdogan's influence over monetary policy and a bitter dispute with Washington.
JP Morgan said moves by Turkish authorities showed they were committed to stabilising the currency with technical measures such as restricting foreign exchange swaps and cancelling repo auctions to push up the average cost of bank funding.
"Yet at the same time (Turkish authorities) are reluctant to adopt orthodox policy frameworks," JP Morgan said.
"We suspect that there are diminishing marginal returns to additional technical measures so long as they are not accompanied by a fundamentally-oriented policy package."
Investors said Albayrak's conference call would test whether Turkey can persuade markets that its monetary policy is not hostage to political influence.
The White House said on Wednesday that it would not remove steel tariffs on Turkey, appearing to give Ankara little incentive to work for the release of Andrew Brunson, a pastor on trial in Turkey on terrorism charges.
Washington wants the evangelical Christian freed but Turkish officials say the case is a matter for the courts.
President Donald Trump doubled tariffs on Turkish metals exports to the United States last week prompting Ankara, which says it will not bow to threats, to raise tariffs on US cars, alcohol and tobacco by the same amount yesterday.
The pastor row is one of several between the NATO allies, including diverging interests in Syria and US objections to Ankara's ambition to buy Russian defence systems, that have contributed to instability in Turkish financial markets.
