European session review: JPY and CHF fall, while CNY and AUD gain as risk appetite revives

The safe-haven JPY and CHF fell against their major rivals in the European session on Tuesday, while CNY and AUD rose as risk appetite revived as worries about the potential economic impact of the coronavirus outbreak in China eased somewhat after the country announced the stimulus plans to support its growth.

On Monday, the People's Bank of China (PBoC) injected 1.2 trillion yuan (over $170 billion) into the financial system and cut the reverse repo rates by 10 basis points to help revive the country's economic growth. On Tuesday, the Chinese central bank poured 500 billion yuan into the financial system through reverse repo operations.

In addition, AUD was supported by the Reserve Bank of Australia's (RBA) decision to leave its main cash rate unchanged at 0.75 percent.

Elsewhere, GBP traded mixed against its major rivals after the release of the UK construction PMI data for January, which pointed to a much slower decline in the sector's output than that seen at the end of 2019. According to IHS Markit/CIPS, the headline seasonally adjusted UK Construction Total Activity Index rebounded from 44.4 in December 2019 to 48.4 in January 2020. Economists had expected an increase to 46.6. The latest reading was still below the 50.0 no-change threshold, but signaled the slowest fall in overall construction output for eight months.