USD rose against its major rivals in the European session on Friday, as the benchmark 10-year Treasury yields held above 1.61%, as investors awaited the release of the April data on the core PCE price index (12:30 GMT), the Federal Reserve's preferred measure of inflation, which could provide cues on the near-term direction of the U.S. monetary policy.

The U.S. Dollar Index (DXY), measuring the U.S. currency's value relative to a basket of foreign currencies, increased 0.39% to 90.33, rebounding further from the four-month lows it reached earlier in the week.

Hotter-than-anticipated April's U.S. CPI data, which were released earlier this month, raised worries that accelerating inflation might prompt the Federal Reserve to pull back on its stimulus for the U.S. economy. But the Fed's officials have been playing down the risk of rising prices, reiterating the view that any spike in inflation will be temporary.

Market participants also awaited the announcement of a $6 trillion budget proposal by the U.S. President Joe Biden later today. The New York Times (NYT) reported on Thursday that Biden is to unveil his budget plans on Friday, which calls for around $6 trillion in federal spending for the 2022 fiscal year.