* Dollar stays under pressure with Fed policy outlook
* Aussie hits six-week high on rise in business confidence
* China retail sales, industrial output data due later
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
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
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.