European stocks and euro fall on Turkey concern

On Friday European stocks fell the most in almost a month, following shares lower in Asia, as concern emerged that Turkey’s economic problems will spill over into the euro zone. The common currency sank, while the dollar advanced alongside Treasuries.

The Stoxx Europe 600 Index slid, dragged down by banks and miners, after a news report said the ECB was concerned about the exposure of European lenders to Turkey. U.S. equity futures declined alongside shares from Hong Kong to Sydney. The euro dropped to the weakest level in a year, while the dollar rallied with Treasuries and core European bonds. Turkey’s lira sunk to a fresh record low amid the diplomatic spat with the U.S., as Turkish investors look to President Recep Tayyip Erdogan to calm their nerves when he speaks Friday for the first time since the latest sell-off began.

Geopolitical tensions between the U.S. and other countries set the tone for markets this week, with the latest leg of the lira’s downward spiral triggered by a diplomatic row with America. Earlier in the week, China responded to the Trump administration’s latest trade war volley with additional tariffs of its own. The ruble hit a two-year low after the U.S. announced new sanctions on Russia over the March 4 nerve-agent attack on a former double agent in the U.K.

The Stoxx Europe 600 Index sank 0.9 percent as of 10:56 a.m. London time. Futures on the S&P 500 Index sank 0.4 percent. The U.K.’s FTSE 100 Index dipped 0.6 percent. Germany’s DAX Index sank 1.6 percent. The MSCI Emerging Market Index dipped 0.9 percent to the lowest in more than a week. The MSCI Asia Pacific Index dipped 1 percent, the biggest decrease in more than a week.

West Texas Intermediate crude increased less than 0.05 percent to $66.84 a barrel. Gold dipped 0.2 percent to $1,210.55 an ounce.