US dollar rose in European trade against a basket of major rivals following bullish remarks by the Federal Reserve and ahead of important economic data from the US, especially private sector employment data.

The dollar index rose 0.2% to 96.14, with an intraday low at 95.87, after losing 0.3% yesterday, marking two-week lows at 95.51 on risk aversion.

Moderna's CEO said in recent remarks that current Covid 19 vaccines won't be as effective against the Omicron variant. 

Across November, the dollar index rose 1.9% on prospects of a US rate hike soon, with Fed Chair Jerome Powell discussing the possibility of ending the bonds purchases programs a few months earlier than expected.

The statements bolstered the case for an accelerated rate of US policy tightening, with markets now fully pricing in a 25 basis points rate hike in June 2022.

Later today, investors await data on US private sector employment, and industries, with Powell completes his Congressional testimonies.

The ADP new jobs report is expected to show an increase of 525,000 new jobs in November, after adding 571K jobs in October.

The manufacturing PMI is expected at 61.3 from the US in November, compared to 60.8 in October.

Euro fell in European trade against dollar away from two-week highs on profit-taking, following remarks by Fed Chair Jerome Powell ahead of Congress, which bolstered the greenback.

EUR/USD fell 0.2% to 1.1310, with an intraday high at 1.1360, after closing up 0.4% yesterday, marking two-week highs at 1.1383 following historic European inflation data.

European consumer prices spiked 4.9% in November, the highest pace ever on record, turning the pressure up on the ECB.

The euro lost 1.9% throughout November against dollar, the fourth monthly loss in a row on divergent policy paths between US and Europe. 

The dollar index rose 0.25% away from two-week lows at 95.89 against a basket of major rivals. 

The gains come amid renewed haven demand on dollar, and after highly bullish remarks from Fed Chair Powell ahead of Congress.

Powell said it's time to stop calling current inflation "transient", showing serious interest to tighten policy sooner than expected.

He also believes the impact on Omicron variant will be much less than that of the original virus in Spring of 2020.

The US dollar fell against most of its peers on Tuesday, amid concerns over Omicron, but the greenback pared some of its losses after Federal Reserve Chairman Jerome Powell's statements.

South Africa detected the omicron variant last week, and countries around the world have rushed to tighten border closures, but US President Joe Biden said that there is no need to tighten lockdown restrictions.

Federal Reserve Chairman Jerome Powell said in a pre-prepared testimony before the US Congress that Omicron may pose a threat to the recovery of employment and US economic growth and cause inflationary pressures that could persist longer.

Moderna CEO Stephan Bancel said that existing vaccines could be be less effective against the new variant Omicron as than with Delta.

Powell hinted that the Fed will accelerate the pace of reducing asset purchases, despite concerns over Omicron.

The dollar index fell against a basket of major currencies by 0.2% to 96.1 points as of 18:44 GMT, after hitting a high of 96.2 points and a low of 95.5 points.

Gold prices fell on Tuesday, despite the US dollar's drop against most currencies and a risk-averse sentiment.

South Africa detected the omicron variant last week, and countries around the world have rushed to tighten border closures, but US President Joe Biden said that there is no need to tighten lockdown restrictions.

Federal Reserve Chairman Jerome Powell said in a pre-prepared testimony before the US Congress that Omicron may pose a threat to the recovery of employment and US economic growth and cause inflationary pressures that could persist longer.

Moderna CEO Stephan Bancel said that existing vaccines could be be less effective against the new variant Omicron as than with Delta.

Powell hinted that the Fed will accelerate the pace of reducing asset purchases, despite concerns over Omicron.

The dollar index fell against a basket of major currencies by 0.2% to 96.1 points as of 18:50 GMT, after hitting a high of 96.2 points and a low of 95.5 points.

Gold spot prices fell 0.3%, to $1,776.8 an ounce as of 18:50 GMT.