USD fell against its major rivals in the European session on Thursday as favorable developments on the vaccine and U.S. fiscal stimulus fronts spurred investors to buy riskier assets.

The U.S. Dollar Index (DXY), measuring the U.S. currency's value relative to a basket of foreign currencies, dropped 0.42% to 90.74.

The market enthusiasm that followed Wednesday's news that the UK became the first western country to approve a COVID-19 vaccine from Pfizer /BioNTech was bolstered further by increased hopes for additional fiscal support, as the U.S. lawmakers resumed stimulus talks.

The media reported that the U.S.House Speaker Nancy Pelosi and Senate Minority Leader Chuck Schumer said that a $908 bln bipartisan stimulus proposal, which was introduced on Tuesday, should be a starting point for negotiations with the Republican leaders. But the Senate Majority Leader Mitch McConnell does not appear to support the bipartisan proposal. 

Investors' optimism, however, was tempered by a renewed acceleration in coronavirus infections in the U.S. and fears that the country could face a very hard winter until the COVID-19 vaccines are broadly distributed. Los Angeles Mayor Eric Garcetti issued a new stay-at-home order amid rising coronavirus cases. The U.S. health regulators are expected to make determinations on the vaccines from Pfizer/BioNTech and Moderna later this month.