Forex Today: China lifts market mood by cutting tariffs, coronavirus fears fade, cryptos climb

Here is what you need to know on Thursday, February 6:

Trade: China has announced that it will cut tariffs on imported US goods by half from February 14. Washington reduces levies in Beijing on the same day, as agreed in Phase One of the trade deal. Stock markets are extending their gains, and risk currencies are on the rise. The safe-haven yen is on the back foot while gold is consolidating its losses. 

Coronavirus: The global mood is also favorable due to efforts made to find cures and vaccines to the respiratory disease. Nevertheless, the World Health Organization has played down the chances of an immediate solution. Hubei province, which includes the city of Wuhan – the epicenter of the coronavirus – is under lockdown for two weeks. Most of the 560 mortalities and 28,000 infections are in that region. 

Oil: While OPEC and non-OPEC countries are still struggling to reach an accord, prices of the "black gold" have bounced off the lows as the global mood improves. Russia wants to extend current output cuts while Saudi Arabia intends to go further. 

Upbeat US data has pushed the US dollar higher, mostly against the euro and the pound. The ADP employment report showed a leap of 291,000, and the ISM Non-Manufacturing Purchasing Managers' Index exceeded estimates with 55.5 points. The figures raise expectations ahead of Friday's Non-Farm Payrolls. Productivity, Unit Labor Costs, and Unemployment Claims are due out today.

Europe: Christine Lagarde, President of the European Central Bank, has reiterated that the outlook is uncertain. She speaks on Thursday as well. Phil Hogan, European Commissioner for Trade, visits Washington and will meet Robert Lighthizer, his American counterpart. EU-US trade relations remain sensitive.  

GBP/USD remains torn between upbeat data – such as the upward-revised Services PMI for January – and concerns about post-Brexit EU-UK relations. Brussels will reportedly target London's financial services sector with regulation changes. Both sides laid out different visions for a trade deal.

AUD/USD is gaining ground amid the upbeat market mood as traders ignore a disappointing drop in retail sales and lower than expected trade balance surplus. 

US politics: The US Senate acquitted President Donald Trump in his impeachment trial with only one Republican Senator voting against the president. In the Democratic Party, the updated vote count in Iowa has shown that moderate Pete Buttigieg and left-leaning Bernie Sanders are head to head

Cryptocurrencies remain bid, with Bitcoin extending its gains to above $9,600, Ethereum topping $200, and Ripple trading at $0.28.