It posted its lowest close in nearly two weeks on Thursday, dragged down by an 8.8% slump in Brazilian stocks, on a report that President Michel Temer supported an attempt to bribe a potential witness to remain silent in the country's biggest-ever graft probe.
In spite of reports that President Trump called the move to name a special counsel to take over the FBI investigation a "witch hunt", USA stockmarkets ended the session higher, with the Dow Jones gaining 0.3 per cent and the S&P 500 index moving 0.4 per cent higher.
The dollar index, which tracks the greenback against a basket of six major peers, was slightly lower at 97.824, after gaining 0.3 percent on Thursday.
MSCI's emerging markets index extended losses by 0.15 percent on Friday. Hong Kong's Hang Seng rose 0.4 percent to 25,227.02.
Chinese shares were little changed, up 0.4% for the week.
Temer refused yesterday to resign after the Supreme Court authorised an investigation into the allegations.
The Brazilian real was fractionally weaker at 3.3685 against the dollar early on Friday, after plunging as much as 8.5% to its lowest level since December on Thursday. The decline was the biggest since the currency was devalued in 1999 and wiped out all of this year's gains.
Strong economic indicators from the US helped lift the dollar overnight, but it slipped back on Friday. The dollar strengthened to 111.25 yen from 110.82 yen. It is set for a 1.7 per cent fall over the week. Britain's FTSE 100 was up 0.4 percent at 7,465. It's set to end the week 1.4 percent lower. The digital currency has more than doubled since March, driven by soaring demand for crypto-assets with the creation of new tokens to raise funding for start-ups using blockchain technology.
On Thursday, it broke through $1.30 for the first time in nearly eight months after news of better than expected British retail sales growth helped ease concern about the broader economy.
In commodities, oil prices continued their gains for the third straight session, set to post a 4 per cent weekly rise, on optimism that producers will agree to rein in output for longer.
The dollar also managed to claw back some losses, having tumbled to seven-month euro lows but analysts said Trump's troubles were unlikely to throw the Federal Reserve off its course of raising interest rates next month and the unit would continue to face headwinds.
ENERGY: Benchmark U.S. crude oil futures fell 68 cents to $48.39 a barrel in electronic trading on the New York Mercantile Exchange while Brent crude, used to price worldwide oils, was 65 cents lower at $51.56 a barrel in London.
And in early European trade London rose 0.3 percent, while Paris and Frankfurt each rose 0.1 percent. Spot gold added 0.25% to $1,249.84/oz, set to post a weekly gain of 1.7%.