European session review: JPY gains amid lingering coronavirus worries

JPY strengthed against most major counterparts in the European session, while HKD and AUD, as well as other commodity-linked currencies, weakened as demand for "safe havens" remains strong amid lingering worries about the impact of the coronavirus outbreak on the global economy. 

A coronavirus outbreak that originated in Wuhan has killed at more than 80 people in China and infected nearly 2,800 people globally. China’s National Health Commission announced on Sunday the ability of the virus to spread was getting stronger. China’s government promised to extend the Lunar New Year holidays to help prevent and control the virus.

Elsewhere, GBP traded little changed against most major rivals after the release of the December data on U.K. mortgage approvals. 

The report from UK Finance revealed that gross mortgage lending across the residential market in December 2019 was £22.2 billion, bringing the annual total for 2019 to £265.8 billion. Although annually 1.1 percent lower than in 2018, the last two years have broadly reflected the continuation of a stronger long term lending trend over recent years. An annual total of 982,286 mortgages were approved by the main high street banks during 2019, 7.4 percent more than in 2018. The full-year number of mortgages approved for home purchases were 8.0 percent higher, remortgage approvals were 7.9 percent higher and approvals for other secured borrowing were 3.0 percent higher than in 2018. 

Market participants await the Bank of England's (BoE) decision on its interest rates later this week. While weak economic data and dovish remarks from the BoE's officials have triggered speculation that the bank could lower rates as its January 30 meeting, upbeat economic readings in recent days have cast doubt on that view. Markets see the odds of the rate cut as 50-50.