The dollar fell on Friday, set for its biggest weekly decline since March, as markets braced for a speech by Federal Reserve chair Jerome Powell for hints on the direction of monetary policy, while a gauge of global stocks barely budged.

The MSCI All-Country World index, which tracks shares in 47 countries, barely managed to keep in the black, as markets in Europe opened mixed. Most major bourses in Europe registered gains of 0.1 per cent apiece, although the exception was Britain's FTSE100 index, which fell 0.1 per cent.

The dollar index against a basket of six major currencies stood at 95.516, down 0.2 per cent on the day. The US currency took a hit this week after US President Donald Trump said he was “not thrilled” with the Federal Reserve under his own appointee, Chairman Jerome Powell, for raising interest rates.

Analysts said growing US political uncertainty, reinforced by the criminal convictions of two of Trump's ex-advisors this week, was keeping the dollar under pressure, despite the United States embarking on greater monetary tightening than elsewhere.

“In the current state of the US political system, that is dominated by doubts in the system of checks and balances, remnants of U.S. dollar negativity remain,” said Commerzbank analyst Ulrich Leuchtmann.

Powell is due to give a speech later in the day at the Jackson Hole, Wyoming, conference of central bankers. Where he stands on the pace of interest rate hikes will be scrutinised after minutes from the Fed's most recent policy meeting indicated the central bank would tighten monetary policy soon.

The Fed should raise rates further this year and probably next year as well, despite Trump's opposition to tighter policy, Kansas City Fed President Esther George had said in an interview aired on Thursday. Dallas Fed President Robert Kaplan also said Trump's comments would not affect the central bank's decision making.

The greenback was 0.1 per cent higher against the yen, at 111.405 yen per dollar. It was 0.2 per cent lower to the euro at $1.15605. Elsewhere in currencies, the Australian dollar was the biggest mover, gaining half a percent on the day after the ruling Liberal party voted in a new leader.

Trade talks end without progress

Earlier in Asia, stocks fell after US-China trade talks ended without any progress. MSCI's broadest index of Asia-Pacific shares outside Japan shed 0.25 per cent. It was still up about 1 per cent on the week.

Hong Kong's Hang Seng fell 0.55 per cent and the Shanghai Composite Index gained 0.2 per cent. Australian stocks rose 0.15 per cent and South Korea's KOSPI advanced half a per cent. Japan's Nikkei climbed 0.85 per cent, lifted by a weaker yen.

The S&P 500 shed 0.17 per cent overnight to pull back slightly from a record high scaled midweek, with industrial shares sagging after the United States and China imposed a fresh round of trade tariffs on each other.

Shares of industrial giants Caterpillar Inc and Boeing Co , bellwethers of trade confidence, were among the biggest drags on the Dow, which lost about 0.3 per cent. Caterpillar shares fell 2.0 per cent, and Boeing shares fell 0.7 per cent.

“Global risk sentiment remains somewhat jittery ahead of Fed Chair Powell's speech with US-Sino trade talks failing to yield any immediate progress,” strategists at OCBC Bank wrote.

Oil price rose. Brent crude futures rose 1 per cent to $75.42 per barrel, while US crude added 0.9 per cent to $68.46.

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