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The dollar index against a basket of six major currencies (DXY) was a shade higher at 94.748. The index had nudged up about 0.15 percent overnight, ending a four-day losing streak.

·       The euro was down 0.1 percent at $1.1662 (EUR=) after losing about 0.3 percent overnight when a rise in Italian government bond yields put additional pressure on the currency.

·       China's yuan was about 0.15 percent firmer in onshore trade at 6.8344 per dollar after shedding 0.35 percent the previous day.

·       The Japanese yen stood little changed at 111.000 . The yen, another perceived safe haven along with the dollar and Swiss franc, had advanced 0.6 percent on Thursday.

·       The Turkish lira was steady against the dollar on Friday, having tumbled a day earlier on reports that the central bank deputy governor and rate-setter Erkan Kilimci was leaving the bank.

The lira TRYTOM=D3 traded at 6.6500, at 0505 GMT, unchanged from Thursday's close, but well off an overnight low of 6.8994. Turkish markets were closed for a public holiday on Thursday, but the lira continued to trade offshore.

·       The Turkish lira saw heavy selling again Thursday afternoon, amid a broader sell-off for emerging markets and after a report of a possible resignation at the country's central bank.

The U.S. dollar was up over 4 percent on Thursday against the Turkish currency, trading at 6.7422 by 1:00 p.m. London time. The lira has already seen a roughly 40percent depreciation against the greenback since the beginning of the year.

Thursday's losses were accentuated by a Reuters report, that cited two sources familiar with the matter, stating that the Turkish central bank's deputy governor and Monetary Policy Committee member Erkan Kilimci is set to resign. The Development Bank of Turkey released a document on Thursday showing Kilimci had joined its board, Reuters reported.

The central bank was not immediately available for comment when contacted by CNBC.

·       Emerging market currencies had less luck, with currencies relying on foreign capital to finance their current account deficit hit the hardest.

The peso ARS=RASL, the world's worst-performing currency this year due to the country's poor economic health, fell 10 percent on the day, bringing its month-to-date losses to 27 percent.

Argentina’s central bank at an emergency meeting on Thursday voted unanimously to raise its benchmark rate to 60 percent from 45 percent, however, the unexpected move failed to stabilize the peso.

·       EUR/USD stays neutral/bullish near term – Scotiabank

According to FX Strategists at Scotiabank, the pair’s near term outlook point to the neutral/bullish side.

Key Quotes

“EURUSD effectively held support in the upper 1.16s through yesterday’s trading and spot has continued to consolidate through the middle of the week”.

 “The technical undertone for the EUR remains constructive on the short-term charts but spot will have to push on – sooner rather than later - if positive momentum is to be sustained. We see the top of the consolidation band at 1.1715 and look for the EUR rally to extend above here towards 1.1790/00. Support is 1.1645/50”. 

·       President Donald Trump rejected an offer from the European Union to eliminate tariffs on cars if the U.S. did the same in an interview with Bloomberg on Thursday.

Hours earlier, EU Trade Commissioner Cecilia Malmstrom told the European Parliament's trade committee that the EU is "willing to bring down even our car tariffs to zero, all tariffs to zero, if the U.S. does the same."

Trump said that the offer is "not good enough," adding that European "consumer habits are to buy their cars, not to buy our cars."

·       U.S. President Donald Trump, speaking to a raucous, campaign-style rally in Indiana, warned on Thursday that the Justice Department and the FBI must “start doing their job and doing it right” or “I will get involved.”

Trump, who has repeatedly criticized the department over its handling of a probe into alleged Russian interference in the 2016 election campaign, suggested its leadership was biased against Republicans and that “people are angry.”

·       European Commission President Jean-Claude Juncker said he hoped a July “ceasefire agreement” with U.S. President Donald Trump to refrain from imposing car tariffs would prevail, but the EU would impose its own tariffs if the U.S. changed course.

·       Kremlin said on Friday it did not rule out the possibility that Russian President Vladimir Putin could hold talks with U.S. President Donald Trump at three summits due to take place in 2018, including those in Singapore, France and Argentina.

Kremlin spokesman Dmitry Peskov told Izvestiya newspaper that Moscow is keen to hold such talks but “all depends on reciprocity”.

·       Oil prices dipped on Friday on concerns that the trade war between the United States and China could intensify, although looming U.S. sanctions against Iran’s oil exports and falling Venezuelan output prevented bigger falls.

International Brent crude oil futures LCOc1 were at $77.64 per barrel at 0654 GMT, down 13 cents from their last close.