On Friday, the Dollar rose against major currencies, including the Euro, which was on track for its first weekly decline this month.

This came after a week of central bank activity and ongoing concerns about the potential effects of a global trade war.

The dollar index, which tracks six major currencies, increased by 0.19% to 103.99, following a 0.36% gain on Thursday. Its strongest daily performance in three weeks was after the Federal Reserve signalled that it had no immediate plans to reduce interest rates.

The single currency, which carries the largest weight in the Dollar index, fell 0.15% to $1.0836 after a 0.45% decline on Thursday. It is poised to finish the week 0.4% lower, following a strong two-week rally fuelled by Germany's substantial spending plans.

Germany's upper house of parliament, the Bundesrat, approved a reform of the country's borrowing rules along with a €500 billion fund aimed at overhauling its infrastructure and revitalising Europe's largest economy. The proposals were passed by the lower house of parliament on Tuesday, Reuters reports.

The Euro had surged over the past two weeks due to spending plans from Germany's chancellor-in-waiting, Friedrich Merz, though uncertainties about the amount and timing of the spending persisted.

Kenneth Broux, head of corporate research for FX and rates at Societe Generale, noted that the Euro's movement on Friday was primarily driven by profit-taking.

“Overall we've seen a pause in the recalibration away from Dollar assets, and that's also been evident in FX, where we've seen the Euro starting to retrace some of the gains since the end of January,” Broux commented.

This week, major central banks, including the Fed, the Bank of England, and the Bank of Japan, decided to leave interest rates unchanged while evaluating the economic effects of US President Donald Trump's trade tariffs on global trading partners.

Federal Reserve policymakers indicated they expect two quarter-point rate cuts later this year, maintaining the same median forecast as three months ago.

“We're not going to be in any hurry to move,” Fed Chair Jerome Powell said, highlighting the challenge policymakers face in managing Trump's tariff policy and its potential impact on the domestic economy.

Elsewhere, the British Pound dropped 0.2% to $1.2940. On Thursday, the Bank of England kept UK interest rates unchanged and cautioned investors not to assume additional rate cuts were certain, due to the ongoing uncertainty surrounding both the global and UK economies.