The euro slumped with emerging-market currencies and stocks declined amid concern Turkey’s problems are spilling over. The Turkish lira hit a fresh record low amid a souring of diplomatic relations with the U.S.

The common currency sank and the dollar extended gains as the Financial Times reported that the European Central Bank was concerned about the Turkish exposure of some banks. Traders sought out traditional havens in U.S. Treasuries and the yen. Turkish investors are looking to President Recep Tayyip Erdogan to calm their nerves when he speaks Friday for the first time since the latest selloff began. Other emerging market currencies fell in sympathy with the lira, and U.S. and European equity futures fell alongside Asian bourses.

“My guess on the euro is that its related to contagion from Turkey,” said Raymond Lee, money manager at Kapstream Capital in Sydney. “At the moment it doesn’t feel like a systemic issue but more a market reaction to the surprise.”

Geopolitical tensions between the U.S. and other countries have set the tone for markets this week as 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.

Investors will be closely watching bank shares in Europe, with Spain’s Banco Bilbao Vizcaya Argentaria SA, UniCredit SpA and BNP Paribas SA mentioned in the Financial Times report. The ECB doesn’t see the situation as critical but is concerned about exposure to the plunge in the Turkish lira, it said, citing people familiar with the matter.

Elsewhere, Tesla shares rose in post-market trading after CNBC reported that its board planned to meet with financial advisers next week to formalize a process to take the co. private and would ask CEO Elon Musk to recuse himself from the process.

These are the main moves in markets:

Stocks

The MSCI Asia Pacific Index declined 1.1 percent as of 3:05 p.m. Tokyo time.

Topix index sank 1.1 percent.

Hong Kong’s Hang Seng Index declined 0.9 percent.

Kospi index declined 0.9 percent.

Australia’s S&P/ASX 200 Index fell 0.3 percent.

Futures on the S&P 500 Index sank 0.4 percent to 2,843.50

EuroStoxx 50 futures fell 0.5 percent

Currencies

The Japanese yen rose 0.1 percent to 111.02 per dollar.

The offshore yuan fell 0.3 percent.

The euro declined 0.6 percent to $1.1458.

The Bloomberg Dollar Spot Index rose 0.4 percent to 1,187.56.

Bonds

The yield on 10-year Treasuries decreased two basis points to 2.91 percent, the lowest in three weeks.

Australia’s 10-year yield fell five basis points to 2.608 percent.

Japan’s 10-year yield declined one basis point to 0.10 percent.

Commodities

West Texas Intermediate crude decreased 0.2 percent to $66.65 a barrel, the lowest in seven weeks.

Gold decreased 0.4 percent to $1,207.47 an ounce, the weakest in 17 months.

LME copper dipped 1.1 percent to $6,158.00 per metric ton.

Source: Bloomberg