In an unusual criticism of its neighbour and ally, China’s Foreign Ministry expressed "grave concern and opposition" to North Korea's latest missile launch.

The dollar rose versus the yen on Wednesday, buoyed by robust U.S. economic data while the effect from North Korea's latest missile was muted. Market participants are focused on how the U.S. will respond to the test.

USD/JPY was up overnight to 111.67, adding to gains from the previous day when it rose 0.35 percent. Data on Tuesday showed U.S consumer confidence surged to a near 17-year high in November, lifted by a strong labor market.

U.S. Senate Republicans pushed forward President Donald Trump's tax cut bill on Tuesday that set up a full vote by the Senate as soon as Thursday, although some details of the measure remained unsettled.

EUR/USD edged higher to 1.1875 after slipping more than 0.5 percent overnight, pulling back from a two-month high of 1.1961 scaled on Monday on upbeat German data.

The dollar index against a basket of six major currencies was little changed above 93.00 following overnight gains of 0.4 percent.

The pound was the best performer overnight. Cable is up almost 0.6 percent against the dollar and 0.40 percent versus the euro. GBP/USD rose to 1.3430 breaking above a two-month high at 1.3388 set the previous days after The Daily Telegraph reported that Britain and the European Union had agreed on the Brexit divorce bill.