Turkey's lira jumped about 2% on Thursday and was on track for its best day in nearly three weeks after the US and Turkish leaders spoke by phone and set up a late June meeting, raising hopes that strained diplomatic relations would ease.
The lira stood at 5.9050 at 1254 GMT, having firmed 1.8% from Wednesday's close of 6.0155. Earlier it touched 5.8650, the currency's strongest level since April 24.
With Turkish stocks and bonds also logging strong gains, the lira was on track for its sixth straight positive day and longest winning streak this year.
After Turkey's full-blown currency crisis last year, the lira has shed more than 11% in 2019 due in part to growing friction between the Nato allies and the risk of US sanctions if Turkey receives delivery of an S-400 missile defence system it purchased from Russia.
Washington says the surface-to-air weapon would compromise its F-35 fighter jets.
Turkey's dollar-denominated sovereign bonds surged, with the 2030 issue up 0.9 cents on the dollar, its most in two weeks, according to Tradeweb data. The 2045 issue climbed 0.7 cents. Turkey's main share index BIST100 rose 2.08%, while the main banking index was up 2.75% on Thursday.
The lira also firmed earlier this week after Defence Minister Hulusi Akar said delivery of the S-400s may be delayed beyond June, even while he said it will arrive in coming months.
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