News about successful COVID-19 vaccine trials has revived hopes for a quicker economic recovery and triggered the plunge in USD to ten-week lows. Since then, the enthusiasm about the vaccine has waned somewhat and the US currency has gained almost 1% as traders adjusted their positions.

According to OCBC Bank strategist Terence Wu, new drivers might now need to be found to send the US dollar lower.

"The weakness in broad USD and reflationary momentum in equities, which we saw on the back of the US election and improvements in the vaccine situation, seem to be fading across FX and equities," Christin Tuxen, chief analyst Danske Bank, said.

The US dollar is steady despite the fact that on Wednesday the number of new COVID-19 cases in the US surpassed 140,000 for the first time.

In Europe, the epidemiological situation is also challenging.

Thus in Italy, the total number of reported coronavirus cases exceeded 1 million, while more than 32,000 infected people were registered in the country over the past day.

The country's authorities consider imposing tight restrictions to curb the second wave of COVID-19.

"On the relative macro front, Europe is still on a weaker footing compared to US," Terence Wu noted.

According to Eurostat, industrial production in the euro area fell by 0.4% in September on a monthly basis and by 6.8% on an annual basis.

Most likely, we will have a series of weak economic reports from the Eurozone ahead. Against this backdrop, the EUR/USD pair is likely to trade closer to 1.16 rather than to 1.20.

On Wednesday, the main currency pair slipped from Monday's two-month high above 1.1900, to weekly lows around 1.1750.

On Thursday, the pair is trying to rebound from its recent decline and settle above 1.1800 on reports that German company CureVac will soon start its Phase 3 clinical trials of the COVID-19 vaccine.

Earlier, it was reported that the European Commission reached an agreement with BioNTech and Pfizer on the supply of 300 million doses of the vaccine.

Deliveries are expected to begin by the end of 2020, given the successful clinical trials and regulatory approval.

Along with the news from the coronavirus front, investors continue to closely watch the outcome of the US election that took place last week.

The likely winner of the US presidential race, Joe Biden, has already started to build his team. Yesterday, he appointed Ron Klain as the White House Chief of Staff. Klain promised to assemble a talented and diverse team.

"We have to deal with an ambitious agenda for change and seek to heal the divides in our country," the appointed White House chief of staff said.

Meanwhile, current US President Donald Trump still refuses to admit defeat.

CBA experts believe that a 5% jump in the US dollar is possible if Trump finds a way to stay in office, most likely relying on Electoral College votes, even though Joe Biden's candidacy had been previously approved in these states.