The US dollar fell on Friday and was set to close its worst week in more than a year, with losses steepening after reports an investigation into possible collusion between Russia and Donald Trump's presidential campaign now include a person close to the president.

Stocks pared gains on Wall Street and Treasury yields hit session lows after the report from the Washington Post. Separately, the New York Times reported more details on Trump's recent meeting with Russian diplomats in the Oval Office. It was the most eventful week of the year so far for financial markets, with many major equity markets scaling record highs and then plunging mid-week in one of the sharpest cross-asset routs in years.

Stocks on Wall Street pared gains of as much as one per cent on the S&P 500. The Friday reports out of Washington came after European markets had closed.

"I'm sure some of [the move in markets] is related to that, and the fact that Trump is going to be out of the country and nobody's quite sure what he's going to do," said Paul Nolte, portfolio manager at Kingsview Asset Management in Chicago. "We've got two days now to wring our hands about what might happen," he said, adding that the stock market didn't seem too concerned at this point.

The Dow Jones Industrial Average rose 141.82 points, or 0.69 per cent, to 20,804.84, the S&P 500 gained 16.01 points, or 0.68 per cent, to 2,381.73 and the Nasdaq Composite added 28.57 points, or 0.47 per cent, to 6,083.70. The three major indexes fell for the week.

The pan-European FTSEurofirst 300 index rose 0.55 per cent and MSCI's gauge of stocks across the globe gained 0.73 per cent.

Emerging market stocks rose 0.74 per cent.

Emerging markets have been grappling with an unfolding corruption scandal in Brazil that threatens to engulf its president, Michel Temer.

The US dollar fell 0.8 per cent against a basket of currencies and was down about 2.1 per cent for the week, its largest weekly drop since April 2016. Besides worries surrounding Trump, the US currency has suffered from a resurgent euro, which has gained more than two per cent last week.

Safe-haven gold posted its best week in five as the dollar softened. Spot gold added 0.7 per cent to $1,255.37 an ounce. US gold futures gained 0.20 per cent to $1,255.30 an ounce.

Source: Khaleej Times