The euro extended its gains in Asia on Friday after the head of the European Central Bank said policymakers would begin re-evaluating its stimulus in the autumn, fuelling talk that the age of cheap money was coming to an end.

However, regional markets struggled as profit-takers moved in after a healthy week and traders were spooked by reports the man probing Donald Trump's links to Russia will also investigate his business dealings.

The news is the latest to dent confidence in the president's ability to push through promised market-friendly reforms, which had helped fire a global surge in the months after his November election win.

ECB boss Mario Draghi on Thursday tried to play down talk the bank is preparing to wind in its 60 billion euros ($69 billion) a month asset-buying scheme saying inflation remained tepid.

However, he added: "We simply said that our discussions should take place in the fall, or in autumn, since we are in Europe."

While Draghi tried to remain guarded, traders took that to mean the bank would soon announce a "tapering".

"The ECB’s indication that it will discuss possible changes to its bond buying programme over coming months has been taken as confirmation that it's likely to begin tapering by early next year," said CMC Markets chief market analyst Ric Spooner in a commentary.

The euro -- already on the march against the dollar as the eurozone economy picks up -- ploughed one percent higher Thursday to near two-year highs and in Asia pushed on to $1.1642. It is also sitting at highs above 130 yen for the first time since February 2016.

- Fear of political paralysis -

Spooner added that the single currency had also been given support by Donald Trump's ongoing travails.

"The immediate concern for markets is the potential for a state of political paralysis where the Trump Administration is left without the political capital to achieve its tax reform and infrastructure spending programmes," he said.

Bloomberg News said Robert Mueller, the special prosecutor looking into claims Trump's campaign worked with Moscow to sway the presidential election, would look into past transactions involving the tycoon's firms and Russians in the past.

"Just last week President Trump said expanding the investigation beyond Russia would be out of bounds so with Mueller broadening the inquisition into Trump's business dealings, US political risk could move to whole new level as this foxtrot plays out," said Stephen Innes, senior trader at OANDA.

Most Asian equity markets slipped into the red on Friday, with profit-taking also acting as a drag after a healthy July so far.

Tokyo ended down 0.2 percent, Hong Kong slipped 0.1 percent following a nine-day rally while Shanghai also closed 0.2 percent off.

Sydney eased 0.7 percent and Taipei shed 0.6 percent, while Manila and Jakarta also retreated. Seoul and Singapore rose, however.

But while the investigation continues to drag on market sentiment, upbeat earnings and a positive global economic outlook have kept investors broadly upbeat, with all three main New York indexes sitting around record highs.

In early European trade London rose 0.1 percent, Paris was flat and Frankfurt eased 0.2 percent.

- Key figures around 0720 GMT - 

Tokyo - Nikkei 225: DOWN 0.2 percent at 20,099.77 (close)

Hong Kong - Hang Seng: DOWN 0.1 percent at 26,706.09 (close)

Shanghai - Composite: DOWN 0.2 percent at 3,237.98 (close)

London - FTSE 100: UP 0.1 percent at 7,494.45

Euro/dollar: UP at $1.1642 from $1.1631 at 2030 GMT 

Pound/dollar: UP at $1.2988 from $1.2972

Dollar/yen: DOWN at 111.80 yen from 111.94 

Oil - West Texas Intermediate: UP one cents at $46.93 per barrel

Oil - Brent North Sea: FLAT at $49.30

New York - DOW: DOWN 0.1 percent at 21,611.78 (close)