Global ratings agency S&P on Friday cut Turkey's debt grade for the second time in four months, moving it further into junk territory and predicting the country will go into recession next year.

Turkey on Friday threatened to respond if the United States levied further sanctions over the detention of an American pastor, which has sparked a diplomatic standoff and battered the Turkish currency. 

The Turkish lira is rebounding from record losses a day after Qatar pledged US$15 billion in investments to help Turkey's economy.

The currency strengthened some 3 percent against the dollar on Thursday, trading at around 5.75 per dollar, hours before Turkey's treasury and finance minister were scheduled to reassure international investors about the economy.

The crisis in US-Turkish relations, which already has put Turkey's economy under massive strain, also risks souring military ties between the two NATO allies, unleashing unknown geopolitical consequences.

The embattled Turkish lira tumbled almost 20 percent to new record lows against the dollar on Friday as strains with the United States intensified, but President Recep Tayyip Erdogan defiantly proclaimed Turkey would emerge victorious in an "economic war."

Turkey on Thursday slammed a new law adopted by Israel's parliament defining the country as the nation state of the Jewish people, saying the legislation "trampled" on universal law and the rights of Israeli Arabs.

The legislation, adopted after a tumultuous Knesset session, makes Hebrew the country's national language and defines the establishment of Jewish communities as being in the national interest.

Six candidates are in the running for the Turkish presidency in Sunday's election, including current President Recep Tayyip Erdogan.

After 15 years in power that have already seen Turkey transformed, President Recep Tayyip Erdogan wants to win a new mandate and rank as the key figure of his country's modern history alongside its founder Mustafa Kemal Ataturk.

The winner of Sunday's presidential election will be the first Turkish head of state to govern with expanded powers after constitutional changes were approved in April 2017.

Turkey's ruling party on Thursday confirmed President Recep Tayyip Erdogan as its candidate to run in snap polls in June, while the main opposition party has yet to make a nomination.