FOREX-Yen softens as Syria worries ease, Aussie dlr cheers China data
* Yen slips versus USD as worries about Syria ease
* U.S. to seek Congressional approval for any strike
* AUD & NZD drift higher after upbeat Chinese data
* U.S. holiday, event risks keeping market subdued
By Ian Chua
SYDNEY, Sept 2 (Reuters) - The yen eased against the dollar on Monday, while commodity currencies such as the Australian dollar edged higher in the wake of upbeat Chinese data and worries about an imminent military strike against Syria diminished.
The dollar rose 0.3 percent to 98.35 yen, having risen as high as 98.49 in thin early trade, pulling well away from last week's trough of 96.81. The euro was a touch higher at 130.00 yen, after peaking at 130.20.
The yen had risen recently on heightened geopolitical risks and as investors dumped emerging market currencies as they positioned for the U.S. Federal Reserve to begin scaling back stimulus.
Market activity was limited so far and could remain so with the United States closed for a public holiday and ahead of a heavy week of economic data, headlined by U.S. payrolls.
Major central banks, including the Reserve Bank of Australia, the European Central Bank and Bank of England, also hold their policy meetings this week.
Despite the myriad of upcoming events, it all boils down to one question: when will the U.S. Federal Reserve 'taper' its aggressive bond-buying stimulus and by how much, said DailyFX strategist David Rodriguez.
"A strong upward revision to U.S. economic growth estimates and sharp rises in U.S. Treasury yields suggest the so-called 'Septaper' is on track. But price action around major economic events has been erratic, and a big non-farm payrolls disappointment could derail the nascent U.S. dollar recovery," he said in a report.
Figures on Sunday showed China's factory activity expanded at the fastest pace in more than a year in August, raising hopes that a rapid economic slowdown in the world's second-largest economy may have been arrested.
Appetite for riskier assets was also lifted after U.S. President Barack Obama decided to seek congressional approval for possible action against Syria.
That was likely to delay any strike for at least nine days, and open the risk that Congress will not support such action, an outcome seen in the British Parliament last week.
The euro slipped 0.1 percent to $1.3201, keeping the dollar index steady at 82.086.
Commodity currencies were better bid thanks to Sunday's encouraging Chinese data, though both gold and oil slipped on the Syrian news.
The Australian dollar popped up to $0.8926 from $0.8896 late in New York on Friday, while its New Zealand counterpart climbed 0.5 percent to $0.7760.
The Aussie, however, remained within spitting distance of a three-year trough of $0.8848 set last month.
There is a slew of economic data out of Asia on Monday, not least HSBC's final report on China's manufacturing PMI at 0200 GMT.
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