The US dollar index remained near a six-week high as investors continued to hold out hope for a possible breakthrough in peace talks between the United States and Iran despite the two sides still facing several major unresolved issues.
Global market sentiment, however, remained cautious amid concerns over the potential closure of the Strait of Hormuz, a key strategic route for global energy supplies.
The risk of oil supply disruptions has sent oil prices soaring in recent weeks, raising concerns about global inflationary pressures and the direction of interest rates from major central banks.
US Secretary of State Marco Rubio said there were some positive signs in talks to end the nearly three-month-old conflict in the Middle East.
However, differences of opinion still exist over Tehran's uranium stockpile and control of the Strait of Hormuz, which are the main focus of the talks.
In equity markets, the MSCI Asia-Pacific broadest index outside Japan rose 0.3% and was on track for a modest weekly gain. Japan's market performed better with the Nikkei index rising around 2%.
US stock futures also rose 0.2%, while European futures rose 0.8%, reflecting investor sentiment that is increasingly optimistic about the possibility of a resolution to the geopolitical conflict.
Chris Weston, head of research at Pepperstone, said the current news flow gives the impression that the negotiations are getting closer to something clearer and can be assessed with greater confidence by the market.
However, he stressed that the level of investor confidence is not yet strong enough as geopolitical risks remain high.
Meanwhile, oil prices rose again in early trading on Friday after suffering a sharp drop earlier due to mixed messages from both negotiating parties.
Despite the market's hopes for a peaceful resolution, oil prices are still seen to remain much higher than the levels before the conflict broke out.
