European session review: USD and JPY depreciate, riskier currencies rise as investor sentiment improves further after solid data out of China and Europe

Safe-haven USD and JPY fell against their major rivals in the European session on Tuesday as upbeat economic data out of China and Europe boosted demand for riskier assets. 

USD traded lower against JPY.  EUR traded mixed with declines versus GBP, AUD, NZD, CNY, and gains versus USD, JPY. 

The National Bureau of Statistics (ONS) reported China’s industrial production rose 5.6 percent in August from 4.8 percent in July compared to economists' estimate of +5.1 percent, while its retail sales increased +0.5 percent in contrast to a 1.1 percent decline in July and compared to economists' forecast of +0.1 percent.

Meanwhile, Germany's latest ZEW survey showed that economic confidence strengthened unexpectedly in September. The ZEW Indicator of Economic Sentiment for Germany rose by 5.9 points from the previous month to 77.4 in September, the highest since May 2000, signaling expectations of a noticeable recovery of Europe's largest economy. That was well above economists’ forecast of 69.8. Meanwhile, the current conditions index increased to -66.2 from -81.3 in August. Economists had expected the reading to come in at  -72.0.

Investors’ focus is shifting to the upcoming monetary policy meetings of the U.S. Federal Reserve, Bank of Japan (BoJ) and Bank of England (BoE), the outcomes of which will be released later this week.