The dollar index against a basket of six major currencies extended overnight gains and was up 0.1 percent at 96.250, pulled further away from a three-week trough of 95.824 plumbed on Thursday.
The overnight wobbles in the U.S. currency came as the euro rallied on growing expectations that the European economy may have turned a corner.
But the dollar managed to claw back its losses after data showed U.S. gross domestic product increased at a 2.6 percent annualised rate in the fourth quarter, above economists' forecasts for a 2.3 percent gain.
"The dollar received a clean break as Treasury yields rose in earnest following the robust U.S. GDP data," said Junichi Ishikawa, senior FX strategist at IG Securities in Tokyo.
"The strong response to the U.S. GDP data shows that the market is currently focused on fundamentals, rather than geopolitical factors."
The dollar suffered brief dips against the yen, a perceived safe-haven, this week as tensions between India and Pakistan flared and as a summit between U.S. President Donald Trump and North Korean leader Kim Jong Un ended without an agreement.
But the U.S. currency was on track for a 0.9 percent weekly gain against its Japanese peer.
The euro was steady at $1.1371, having slid from a three-week peak of $1.1420 scaled the previous day.
"Although the Fed effectively declared in January that it was poised to cease hiking rates, bouts of dollar selling have been short-lived," said Daisuke Karakama, chief market economist at Mizuho Bank.
"Even as the Fed's policy normalisation process slows down, the dollar looks to be supported as long as the European and Japanese central banks are stuck with current policies."
The Australian dollar was little changed at $0.7093, stabilising after suffering sharp losses the previous day.
The Aussie took a hit on Thursday after a disappointing reading on Chinese manufacturing overshadowed a solid report on domestic business investment.
The benchmark 10-year U.S. Treasury yield stood at 2.716 percent after surging to 2.731 percent on Thursday, its highest since Feb. 6.
(Editing by Simon Cameron-Moore) ((firstname.lastname@example.org; Reuters Messaging: email@example.com +813-6441-1774))