USD recovered slightly in the European session on Wednesday, as market participants lowered their expectations that the U.S. Federal Reserve will cut its interest rates to support the U.S. economy. 

Fed Vice Chair Richard Clarida stated on Tuesday that the regulator continued to monitor the impact of the coronavirus on the U.S. economy but still too early to assess the growth impact from the epidemic, or whether it will lead to a material change in its outlook. This gave rise to thoughts the dovish Fed bets being priced in by the markets may not materialize, supporting the USD. 

Against a basket of its rivals, the U.S. dollar edged 0.2% higher to 99.16, recovering from a two-week low of 98.876, hit in the previous session.

However, the market sentiment remained cautious amid the global spread of the coronavirus. On this backdrop, commodity currencies like AUD and NZD saw selling pressure.