US stocks fell sharply on Thursday, with the S&P falling 1 percent and the Nasdaq sliding 1.5 percent, hurt by investor nervousness over escalating tensions between the United States and North Korea and lackluster results from retailers Macy's and Kohl's.
The euro was 0.14 percent higher against the dollar.
The single currency fell to a 2-day low of 1.1273 against the Swiss franc, from a high of 1.1332 hit at 5:00 pm ET.
MSCI's broadest index of Asia-Pacific shares outside Japan skidded 1.55%, its biggest one-day loss since mid-December.
Nervous trading marked the 10th anniversary of the start of the financial crisis on Wednesday, after Donald Trump's warning that North Korea faced "fire and fury like the world has never seen" if it continued to make threats against the US. They are looking for confirmation that the Fed is sticking with plans to hike interest rates once more this year.
His comments came after The Washington Post reported that North Korea has successfully produced a miniaturized nuclear warhead that can fit inside missiles, citing a confidential US assessment.
The US dollar slipped to an eight-week low against the Japanese yen on Thursday as continuing tensions between the United States and North Korea led investors to look for assets viewed as less risky.
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Trump took specific aim at North Korean leader Kim Jong Un, saying, he had "disrespected our country greatly", and would not be "getting away with it".
US stocks rose Friday but were still on track for their biggest weekly loss in months, shaken by disappointing earnings results and an escalation of threats between the USA and North Korea.
Japan's Topix index had the biggest slide in nearly three months, falling 1.3 per cent on trading volume 22 per cent higher than the 30-day average at the close.
Politics set an overcast tone for the session, but the detailed action of stocks narrowing and in many instances reversing early losses resulted from earnings reports. Last month, Pyongyang test-fired two intercontinental ballistic missiles, prompting new United Nations sanctions against the country.
"Given the great run we've had, seems like some sort of pullback wouldn't be surprising", said Michael Baele, managing director of investments at U.S. Bank Private Wealth Management.
Investors opted for the perceived safety of US Treasuries, which pushed the yield on the 10-year note three basis points lower to 2.21 percent.
Korea's Samsung Electronics fell 2.8% Friday. The dollar index, which measures its strength against a basket of currencies, was roughly flat at 93.420. Gold prices touched their highest level in more than two months at US$1,285.76 an ounce.