The Turkish lira firmed during Wednesday Asia trade after firming some 8 percent in the last session. The currency traded at 6.2080 to the dollar at 3:00 p.m. HK/SIN, compared to the record low of 7.24 set earlier this week.
The lira's recent steep fall was triggered last week by increased U.S.-Turkey tensions over the detention of an American pastor in Turkey, but weakness in the currency also came against the backdrop of economic issues faced by the country.
Overnight moves in the currency came as Turkey's Finance Minister Berat Albayrak said Tuesday that the country would protect the lira, adding that he thought the currency would firm, Reuters said.
The "rebound in the lira [overnight] gave European banks and other emerging markets some respite. However, it is fair to say that the saga is not over," David Plank, head of Australian economics at ANZ, said in a note.
"The root cause of Turkey's problems — a very large external deficit denominated in foreign currency – remains unaddressed by authorities ... Investors will remain wary of possible contagion to the European banking system and will be keeping an eye on other countries with high levels of foreign-currency debt," he added.
Amid the negative sentiment in Asia, the dollar index, which tracks the greenback against six other currencies, held onto overnight gains to last trade at 96.761. The index earlier touched 96.874 — its highest level since June 2017. Against the yen, the dollar extended gains to trade at 111.21 at 2:58 p.m. HK/SIN.
Turkish President Recep Erdogan refused to back down on Tuesday, calling for Turkey to "produce enough for ourselves" in a speech in which he urged his people to boycott U.S. electronics. "If they have iPhone, there is Samsung on the other side. And we have our own telephone brands," he said.
Stocks stateside rose on Tuesday amid the general improvement in sentiment: The Dow Jones Industrial Average rose 0.45 percent, or 112.22 points, to close at 25,299.92 and the S&P 500 added 0.64 percent to end at 2,839.96, with both indexes gaining after four straight sessions of declines.
In individual movers, Hong Kong-listed shares of Wynn Macau lost 4.29 percent by 2:45 p.m. HK/SIN after Jefferies on Tuesday downgraded Wynn Resorts to hold, from buy. Other casino stocks in Hong Kong also fell, with Melco International Development falling 3.24 percent before the market close.
Meanwhile, Australian biotechnology company CSL bounced 6.39 percent after reporting full-year net profit rose 29 percent to $1.73 billion for the 12 months ending June 30. The company expected net profit for the 2019 financial year to grow between 10 percent and 14 percent compared to 2018.