A Turkish court on Friday rejected another appeal to free US pastor Andrew Brunson, whose detention has sparked a crisis in Ankara's ties with Washington.
The court ruled that Brunson would remain under house arrest, rejecting the third such request.
U.S. President Donald Trump's administration on Thursday signalled new sanctions against Turkey over Brunson's detention and Turkey said it would reciprocate.
The U.S. has already imposed sanctions on two Turkish government ministers and doubled tariffs on Turkish steel and aluminium imports. Turkey retaliated with some $533 million of tariffs on some U.S. imports - including cars, tobacco and alcoholic drinks - and said it would boycott U.S. electronic goods.
Turkey's battered lira weakened 5 percent on Friday after the court rejected pastor's appeal for release. The currency has lost nearly 40 percent of its value against the dollar this year.
The lira crisis has deepened concerns about the broader economy - particularly Turkey's dependence on energy imports and whether foreign-currency debt levels pose a risk to the banking sector.
At 1256 GMT the currency stood at 6.1050 to the dollar, 5 percent weaker. Earlier in the session it fell as much as 7 percent.
Wall Street stocks fell early Friday as the Turkish lira fell on the latest diplomatic frictions.