At 10:00 GMT, the German ZEW Economic Sentiment Index rose to the highest level since July 2021 at 51.7 points in January, from 29.9 in December, beating forecasts of 32.1 points.

At 10:00 GMT, the European ZEW Economic Sentiment Index rose to the highest level since July 2021 at 49.4 points in January, from 26.8 in December, beating forecasts of 29.2 points.

Euro fell in European trade against dollar for third straight session under pressure from a new jump in US treasury yields, bolstering dollar purchases.

EUR/USD fell 0.2% to 1.1385, with an intraday high at 1.1421, after closing down 0.1% yesterday, the second loss in a row on profit-taking away from 1.1482.

The dollar index rose 0.2% on Tuesday for the third straight session against a basket of major rivals. 

Dollar's gains came as US treasury yields continue to rally amid estimates of an interest rate hike by the Fed next March, leading to four overall hikes in 2022. 

US 10-year treasury yields rose 2.1%, the third such gain in a row, marking two-year high at 1.856% while analysts expect it to reach 2% soon.

This development in the bonds market renewed concerns regarding the widening gulf between US and European treasury yields, as the European Central Bank continues to support ultra easy policies. 

Oil prices jumped on Tuesday, and hit nearly 8-year highs, resuming gains after taking a pause yesterday, while Brent continues to rise for the third day in a row, after the deadly attack by the Houthis group on Abu Dhabi, and the UAE pledged to respond quickly.

US crude rose 1.75% to the highest since October 2014 at $85.72 a barrel, after opening at $84.25, and hit a day low at $84.13, and Brent rose 1.8% to the highest since October 2014 at $88.08 a barrel, after opening at $86.52, and hit a day low at $86.47.

US crude lost 0.2% yesterday, while Brent crude gained 0.3%, in the second straight daily gain.

The United Arab Emirates pledged to respond quickly to the Houthis attack in Abu Dhabi that killed three people on Monday.

The Yemen's Houthi rebels claimed responsibility for the attack that caused fires and the explosion of three oil tankers near the oil tanker storage facility of Abu Dhabi's state-owned energy company, ADNOC.

Emirati police stated that the fires broke out in the Mussafah Industrial Area and at a construction site near Abu Dhabi International Airport, adding that the attack was carried out by drones.

This sparked concerns about geopolitical tensions in the Persian Gulf region, which is the world's largest oil producing region, while the UAE output of around 4 million barrels per day.