European session review: USD weakens as risk appetite rebounds on encouraging signs that global coronavirus situation may be improving

USD fell against the rest major currencies in the European session on Tuesday as investors' risk appetite rebounded amid encouraging signs that the spread of the global coronavirus pandemic may be slowing, helped by the lockdown measures.

Market participants' digested the following events: Japan's Prime Minister Shinzo Abe officially declared a month-long state of emergency for Tokyo and six other prefectures due to a climb in coronavirus cases and announced a JPY39 trillion fiscal spending plan to combat the coronavirus pandemic. Meanwhile, the Reserve Bank of New Zealand (RBNZ) announced it would begin purchasing local government bonds on the secondary market as part of its quantitative easing (QE) program to support liquidity and keep interest rates low, while the Reserve Bank of Australia (RBA) left its cash rate at the record low of 0.25%, as widely expected. Traders are also awaiting news on the UK Prime Minister Johnson, who stays in an intensive care unit as he continues to receive treatment for coronavirus.

Commodity currencies were also supported by the expectations that the world's biggest crude producers will agree to cut output to help the oil prices.