Ashitha Shivaprasad  Reuters 

Dec 17 (Reuters) - ICE cotton futures reversed course and fell 2% on Friday, weighed down by worries over the likely impact of the Omicron coronavirus variant on demand for the natural fiber.

* Cotton contracts for March CTH2 fell 2.16 cents, or 2%, at 107.52 cents per lb by 12:25 p.m. ET (1725 GMT). Prices traded between 107.10 cents and 109.40 cents a lb.

* "Cotton is down due to heightened Omicron virus variant worries," said Keith Brown, principal at Keith Brown and Co in Georgia.

* Since the market went higher in the previous session, investors are selling off cotton to reap benefit, which is also adding some pressure to prices, added Brown.

* The market reacted favorably to the Fed's decision, as it was seen as the right step to combat inflation. This positive market vibe played an important role in cotton's rally in the previous session, said Peter Egli, director of risk management at British merchant Plexus Cotton, in a note dated Thursday.

* The Federal Reserve on Wednesday said it would end pandemic-era bond purchases in March and pave the way for three rate hikes by the end of 2022.

* Wall Street indexes were down as risk sentiment weakened in the market place while the dollar .DXYfirmed, further adding to the downbeat mood.

* A stronger dollar also made the fiber more expensive for overseas buyers. USD/

* Total futures market volume fell by 17,837 to 12,411 lots. Data showed total open interest gained 1,220 to 233,798 contracts in the previous session.

(Reporting by Ashitha Shivaprasad in Bengaluru; Editing by Shailesh Kuber)