The dollar struggled to recover Friday and Asian markets suffered fresh losses after Treasury Secretary Steven Mnuchin lowered US growth expectations and appeared to temper Donald Trump's belligerence towards China's currency policy.

While New York's blue-chip Dow index hit a record tenth successive all-time high, the Trump-fuelled global rally is showing signs of petering out with analysts suggesting the exuberance about hoped-for spending and tax cuts may have been overdone.

That appeared evident after Mnuchin forecast three percent growth by the end of next year, warning that the effect of certain measures would take time. That compared with the four percent Trump promised on the campaign trail.

In an interview with CNBC, Mnuchin also appeared to wind back on his boss's earlier threats to call China a currency manipulator, easing concerns about a possible trade stand-off between the world's top two economic powers.

Stephen Innes, senior trader at OANDA, said in a note the comments "have left investors dangling about the US administration currency policy as there appears to be a subtle shift in the Trump administration?s rhetoric".

The comments overshadowed his promise to push through tax cuts by August, and pursue deregulation on companies and banks.

"One reason the market is reading a great deal into (Mnuchin's) views is the proximity of the comments to President Trump's speech before a joint session of Congress next Tuesday," Innes added.

- Peso rebounds -

The dollar tumbled against the yen and pound in New York and while it made some inroads Friday the unit was still under pressure.

It remained wedged below 113 yen while the pound held its gains in the mid-$1.25 range.

High-yielding currencies also pushed ahead, with the Australian dollar up 0.2 percent and South Korean won 0.4 percent higher.

Mexico's peso surged more than one percent to sit at levels not seen since just after Trump's November 8 election win as the country's leaders stand up to the new US administration's threats over trade, a border wall and immigration.

?Traders and investors are seeing the effect of the Mexican stance in tempering the US administration?s overt aggression and making a determination that the worst fears they held for the peso and the Mexican economy were overblown,? said Greg McKenna, chief market strategist at CFD and FX provider AxiTrader.

Asian equity markets extended the previous day's losses. Tokyo's Nikkei ended the morning session 0.2 percent lower as the stronger yen hurt exporters, while Hong Kong was down 0.5 percent and Sydney 0.7 percent off.

Shanghai shed 0.4 percent, Singapore retreated 0.5 percent and Wellington slipped 0.3 percent.

With uncertainty returning to markets after a February rally, gold -- considered a safe bet in times of market turmoil -- rose almost one percent to $1,250.

- Key figures around 0230 GMT -

Tokyo - Nikkei 225: DOWN 0.2 percent at 19,340.68 (break)

Hong Kong - Hang Seng: DOWN 0.5 percent at 23,987.43

Shanghai - Composite: DOWN 0.4 percent at 3,240.49

Euro/dollar: DOWN at $1.0575 from $1.0579

Pound/dollar: DOWN at $1.2543 from $1.2556

Dollar/yen: UP at 112.90 yen from 112.67 yen

Oil - West Texas Intermediate: DOWN 10 cents at $54.35 per barrel

Oil - Brent North Sea: DOWN nine cents at $56.49

New York - Dow: UP 0.2 percent at 20,797.61 (close)

London - FTSE-100: DOWN 0.4 percent at 7,271.37 (close)

source: AFP