Turkey's embattled lira continued its recovery from record lows Thursday, but this doesn't mean its epic fall is over, market experts warn.

With no sign of de-escalation in its tariff spat with the U.S. and the absence of a comprehensive plan to address key economic weaknesses, longer term relief for Turkey is unlikely and risks remain extremely high, according to onlookers.

"I think you're going to see some very quick and quite sharp recoveries, but the trend is not very good, and I suspect this crisis has further to go — because they've done nothing fundamentally to change it," Jim McCaughan, the chief executive at London-based Principal Global Investors, told CNBC's "Squawk Box Europe" Thursday.

"It could be tightening by the central bank, which would slow the economy but might steady up the currency, it could be meaningful moves to reduce either the trade deficit or fiscal deficit, both are possible," McCaughan suggested, pointing to the more fundamental policy changes necessary to stabilize the lira

The currency was trading at 5.7900 to the dollar at 10:30 a.m. Thursday Istanbul time (5:30 a.m. ET), rallying from its record low of 7.24 on Monday.

The currency plummeted 20 percent against the greenback in a single trading day last Friday after President Donald Trump announced a doubling of steel and aluminum tariffs on Ankara, in return for the country's continued detention of American pastor Andrew Brunson. Brunson has been held in Turkey since 2016 on charges of espionage and coup plotting, allegations he denies.

So far, the lira has lost more than 40 percent of its value against the dollar this year, sparking fears of contagion and a sell-off in emerging markets.