Docker client on WSL 2 can’t connect to daemon on windows host

I’ve managed to connect from WSL 1 docker client to daemon on my windows host previously. Updated my WSL 1 to WSL 2, and i can no longer connect, as it failed to communicate with the daemon.

After some googling, I’ve found out that I’ve previously set an environment variable DOCKER_HOST (I’m using bash, therefore in ~/.bashrc). Commented that out, close the terminal, launch a new terminal, and it works. Connected to windows docker daemon without any issues.