The U.S. dollar firmed against its most major rivals in the European session on Thursday, as market participants looked forward to U.S. inflation data for clues on the Federal Reserve's monetary policy outlook.

The U.S. CPI is forecast to rise 0.4 percent on month in May, taking annual rate to 4.7 percent.

Core CPI is seen at 0.4 percent on a monthly basis and 3.4 percent year-on-year.

Strong reading could stoke worries over sooner-than-expected tapering of stimulus measures by the Fed.

In another development, the Biden administration revoked Trump-era bans on TikTok and WeChat and ordered a review of software applications tied to China.

Ahead of this weekend's G7 summit, the U.S. said it will buy 500 million doses of the Pfizer COVID-19 vaccine to share through the global COVAX alliance for donation to 92 low-income countries and the African Union.

The draft G7 document will have leaders committing to 1 billion more coronavirus vaccines to cover 80 percent of the world's population, Bloomberg said.

The currency has been trading higher against its key counterparts in the Asian session, except the pound.

The greenback touched a 3-day high of 1.2153 against the euro and near a 4-week high of 1.4073 against the pound, up from Wednesday's closing values of 1.2178 and 1.4113, respectively. The next likely resistance for the greenback is seen around 1.20 against the euro and 1.37 against the pound.

The greenback approached a session's high of 0.8972 against the franc, compared to yesterday's close of 0.8955. On the upside, 0.92 is likely seen as its next resistance level.

In contrast, the greenback reversed from 6-day highs of 0.7165 against the kiwi, 0.7722 against the aussie and 1.2125 against the loonie and retreated to 0.7188, 0.7742 and 1.2105, respectively. If the greenback falls further, 0.73, 0.80 and 1.20 are likely seen as its next support levels against the kiwi, the aussie and the loonie, respectively.

The greenback eased off to 109.46 against the yen, from a 6-day high of 109.68 seen in the previous session. The greenback is seen finding support around the 108 area.

Data from the Bank of Japan showed that Japan producer prices climbed 0.7 percent on month in May.

That exceeded expectations for an increase of 0.5 percent and was down from 0.9 percent in April.

Looking ahead, the European Central Bank will announce interest rate decision at 7:45 am ET. The ECB is expected to hold its main refi rate at a record low zero percent and the deposit rate at -0.50 percent.

U.S. CPI for May, weekly jobless claims for the week ended June 5 and monthly budget statement for May are scheduled for release in the New York session.

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