European session review: CNH, AUD appreciate amid improved risk appetite

CNH and AUD appreciate against other major currencies as China’s decision to halve tariffs on hundreds of U.S. imports worth around $75 billion bolstered hopes the global economy could avoid a major shock from the new virus outbreak in China and supported the demand for riskier assets. 

The announcement of a tariff cut added to optimism that stemmed from the Chinese central bank's injection of billions of dollars into the financial system earlier this week and its promises of additional stimulus to cushion the economic fallout from the virus, as well as yesterday’s coronavirus vaccine stories.

Market participants also received several important macro reports out of Australia, which were slightly disappointing. The Australian Bureau of Statistics (ABS) reported overnight that Australia Australia's retail sales fell by 0.5 percent m/m in December, following an upwardly revised 1.0 percent m/m gain in November. That missed economists' forecast for a 0.2 percent m/m drop. In a separate report, the ABS revealed that Australia's merchandise trade surplus stood at AUD5.22 billion in December down from the downwardly revised AUD5.51 billion surplus in November. That was shy of economists' forecast for a surplus of AUD5.95 billion.

Elsewhere, EUR traded little changed against most of its major rivals, restrained by weak German data. Destatis reported on Thursday Germany's factory orders decreased 2.1 percent m/m in December, following a revised 0.8 percent m/m decline in November. That was the biggest monthly decrease since February. Economists had expected 0.6 percent m/m gain.