The U.S. dollar declined against its key counterparts in the European session on Wednesday, as a data showed that the nation's core inflation slowed more than forecast in November, triggering uncertainty over a Fed rate hike early next year.

Data from the Labor Department showed that core consumer prices ticked up by 0.1 percent in November after rising by 0.2 percent in the previous month. Core prices had been expected to rise by 0.2 percent.

Meanwhile, consumer prices increased in line with economist estimates last month.

The Labor Department said its consumer price index rose by 0.4 percent in November after inching up by 0.1 percent in October.

Investors await the U.S. Federal Reserve's monetary policy decision later in the day, at which it is widely expected to raise interest rates by a quarter-point.

Market participants are likely to keep a close eye on the accompanying statement as well as outgoing Fed Chair Janet Yellen's press conference for clues about the outlook for future rate hikes.

The currency fell against its major rivals in the Asian session amid political worries, as Democratic candidate Doug Jones defeated Republican Roy Moore for a U.S. Senate seat in Alabama election.

The greenback dropped to 1.1764 against the euro, from a high of 1.1730 hit at 8:15 am ET. The next possible support for the greenback is seen around the 1.185 region.

Data from Eurostat showed that Eurozone industrial production increased unexpectedly in October, after falling in the previous month.

Industrial production rose a seasonally adjusted 0.2 percent month-on-month in October, reversing September's 0.5 percent fall, which was revised from a 0.6 percent decline reported earlier.

Extending early decline, the greenback fell to a 6-day low of 112.96 against the yen. Continuation of the greenback's downtrend may see it challenging support around the 112.00 level.

Data from the Cabinet Office showed that Japan's core machine orders spiked a seasonally adjusted 5.0 percent on month in October, coming in at 850.9 billion yen.

That beat forecasts for a gain of 2.7 percent following the 8.1 percent decline in September.

Pulling away from an early high of 0.9928 against the franc, the greenback weakened to a 6-day low of 0.9887. If the greenback extends decline, 0.975 is possibly seen as its next support level.

The greenback was trading in a negative territory against the pound with the pair trading at 1.3356. This may be compared to a high of 1.3311 hit at 3:15 am ET. On the downside, 1.35 is possibly seen as the next support level for the greenback.

Data from the Office for National Statistics showed that the UK jobless rate remained at the lowest level since 1975, in three months to October.

The ILO jobless rate came in at 4.3 percent in three months to October, the same as in three months to September and in line with expectations. This was the lowest since 1975.

The greenback hit a weekly low of 0.7605 against the aussie and near 2-month low of 0.6987 against the kiwi, off its early highs of 0.7552 and 0.6931, respectively. Further downtrend may take the greenback to support levels of around 0.77 against the aussie and 0.71 against the kiwi.

The greenback slipped to 1.2822 against the loonie, from a high of 1.2880 hit at 4:55 am ET. The greenback is seen finding support around the 1.27 mark.

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