* Yen slips versus USD as worries about Syria ease
* U.S. to seek Congressional approval for any strike
* AUD higher after upbeat Chinese data
By Masayuki Kitano and Ian Chua
SINGAPORE/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 0.5 percent to 98.63 yen, pulling well away from last week’s trough of 96.81. The euro edged up 0.4 percent to 130.29 yen.
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.
“Risk appetite is improving generally. I think the delay in the potential military strikes against Syria will help the global environment in terms of risk,” said Mitul Kotecha, head of global foreign exchange strategy for Credit Agricole in Hong Kong.
A possible strike against Syria was delayed after U.S. President Barack Obama decided to seek congressional approval, opening the risk that Congress will not support such action, an outcome seen in the British Parliament last week.
The delay has eased the market’s nervousness to some extent, Kotecha said, adding that this has likely reduced some of the safe haven demand for the yen.
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.
The weekend data was followed up on Monday by the final Markit/HSBC Purchasing Managers’ Index (PMI), which climbed to 50.1 in August, up sharply from July’s 47.7 and in line with last week’s flash preliminary reading.
Commodity currencies were better bid thanks to the encouraging Chinese data, though both gold and oil slipped on the Syrian news.
The Australian dollar rose 0.7 percent to $0.8966. Australian data showing a bigger-than-expected jump in building approvals in July also helped to underpin the Aussie dollar.
Sterling was another outperformer, rising 0.4 percent to $1.5559, while also gaining ground versus the euro.
The euro touched a two-month low versus sterling of 84.85 pence on Monday, bringing the euro close to its 200-day moving average at 84.81 pence, a major support level.
Sterling stayed on firm footing against the euro in the wake of its stellar performance in August, when the pound posted its best monthly performance versus the euro in a year, buoyed by upbeat UK economic data.
Against the dollar, the euro eased 0.1 percent to $1.3210 .
Markets are in for a heavy week of economic data, headlined by the U.S. jobs data coming up on Friday.
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.