The dollar resumed its rise yesterday, surging to new 13-month highs and upping pressure on commodities, emerging markets and global stocks, though the Turkish lira managed out to eke out a second day of gains.

Wall Street futures pointed to a sharply lower opening.

The lira, a big focus for markets in recent days, bounced as much as 8 per cent as authorities tightened the screws on foreign investors aiming to short the currency. But having firmed beyond six per cent, most of its early gains fizzled out.

The rebound follows a 36-percent drop over the past month and fears remain that Turkey is headed for full-blown crisis and debt defaults. Failure to tackle galloping inflation and Ankara's diplomatic tiff with Washington, is also keeping investors wary.

Attention yesterday turned once again to the dollar, which opened flat but then strengthened 0.16 per cent against a basket of currencies. It is now up more than 5 per cent this year.

As the dollar rise hit commodities, European stocks fell half a percent.

Copper prices hit one-year lows, gold slipped to 18-month lows and Brent crude fell almost $1 per barrel. The latest copper slide, with three-month futures down 2.5 per cent, came after a Chilean mineworkers’ strike was averted.

MSCI’s all-country equity benchmark fell half a percent, though it stayed off one-month lows reached on Monday.

The lira collapse and dollar strength are driving a capital exodus from across emerging markets, sending currencies such as the Argentine peso and Indian rupee to record lows. Emerging equities fell 2 per cent, and are down almost 20 per cent from January highs.

There are concerns also about China’s slowing economy and the yuan’s weakening to 15-month lows against the dollar. That is also pressuring other Asian markets.

The backdrop to all this is the escalation in global trade tensions, with Beijing now lodging a complaint to the World Trade Organisation to determine the legality of US tariff and subsidy policies.

Turkey has also raised tariffs on some US products “in response to the US administration’s deliberate attacks on our economy”, vice president Fuat Oktay wrote on Twitter.

Brokerage FXTM's global head of currency strategy, Jameel Ahmad, said the US-Turkey tensions reminded investors that “it is not just the United States and China that stand at the heart of the global trade war concerns”.