* Dollar stays under pressure with Fed policy outlook unclear
* Aussie hits six-week high on rise in business confidence
* China retail sales, industrial output data due later Tuesday
By Lisa Twaronite
TOKYO, Sept 10 The euro remained near its highest levels since late last month in Asian trade on Tuesday, as risk appetite ticked up after a Russian proposal on Syria raised the chance that a U.S. military strike would be delayed or averted.
President Barack Obama said Russia's proposal to put Syria's chemical weapons under international control "could potentially be a significant breakthrough."
If Syria did so, that would "absolutely" put any U.S. military strike on pause, Obama told ABC News.
The dollar also remained under pressure after last week's disappointing U.S. jobs data increased uncertainty about whether the U.S. Federal Reserve will begin to taper its stimulus programme this month.
"We're definitely in a holding pattern, with the Syria story and the Fed story," said Bart Wakabayashi, head of forex at State Street Global Markets in Tokyo.
"There have been some good flows into the dollar recently, so there was some unwinding of that," he added.
A Reuters poll on Monday showed economists expect the Fed to announce a modest reduction to its $85 billion monthly asset-buying programme by some $10 billion.
San Francisco Federal Reserve Bank President John Williams said Monday that he has not yet made up his mind over whether to support a reduction at the Fed's upcoming meeting next week.
The euro rose about 0.1 percent from late U.S. trading to $1.3260, after rising to $1.3280 on Monday, its highest since Aug. 29, according to Reuters data.
The single currency faces resistance at $1.3278, a level that is roughly 50 percent of the move from its Aug. 20 high of $1.3452 to last Friday's low of $1.3103.
Strong technical support lies around $1.3220, Mitul Kotecha, Hong Kong-based global head of foreign exchange strategy at Credit Agricole Corporate and Investment Bank, said in a research note.
The euro has "easily quashed expectations that it would face a difficult time in the wake of a weaker growth trajectory and ongoing peripheral worries," Kotecha said.
The dollar index, which tracks the greenback against a basket of six currencies, was slightly lower at 81.781, off a more than one-week low of 81.697 touched on Monday.
Against its Japanese counterpart, the dollar was slightly down at 99.54 yen, moving away from Friday's six-week high of 100.22 yen, according to Reuters data.
Minutes of the Bank of Japan's August policy-setting meeting released on Tuesday showed many members believed the central bank's massive government bond purchases are restraining long-term interest rates even as overseas bond yields rise and Japan's business conditions improve.
The Australia dollar climbed to a six-week high after data showing a surge in domestic business confidence made another interest rate cut by the Reserve Bank of Australia appear less likely. National Australia Bank's measure of business confidence jumped to a 27-month peak in August.
The Aussie was up about 0.1 percent at $0.9232 after rising as high as $0.9267, its highest since July 29, and following last week's gains of more than 3 percent.
Later in the session, China will release industrial output and retail sales data.
Data released over the weekend showing China's August exports grew more than expected added to evidence that the economy of Australia's major trading partner remains on solid footing, which underpinned the Aussie.