USD fell against its major rivals in the European session on Wednesday as more upbeat news regarding potential COVID-19 vaccines bolstered risk sentiment. The U.S. Dollar Index (DXY), measuring the U.S. currency's value relative to a basket of foreign currencies, dropped 0.39% to 95.88.

The U.S. company Moderna (MRNA) announced on Tuesday that its coronavirus vaccine candidate produced antibodies in all patients tested in an initial safety trial. 

ITV political editor reported on Wednesday that the Oxford COVID-19 vaccine is "generating the kind of antibody and T-cell (killer cell) response that the researchers would hope to see".

Reports about progress on coronavirus vaccines sparked a risk-on mood in the markets. However, escalating U.S.-China tensions and lingering fears about the economic impact of the second wave of COVID-19 infections kept optimism in check. 

U.S. President Donald Trump signed an executive order to end Hong Kong's preferential treatment last night, adding that he is not interested in continuing trade negotiations with China's officials at this time.

The situation with coronavirus remains another concern. The U.S. has reported more than 59,000 new cases daily for seven days in a row now. Overall, the U.S. has 3,431,574 cases of COVID-19, the most in the world, according to the Johns Hopkins Center for Systems Science and Engineering. Deaths in the country increased to 136,466, also the most in the world. The total number of confirmed global coronavirus cases rose to 13,323,530 and deaths grew to 578,628.