Dollar higher vs. yen, Swiss franc

The dollar was higher against the yen and the Swiss franc on Tuesday as concerns over a U.S. military strike against Syria eased and upbeat Chinese economic data fuelled risk appetite.

During European late morning trade, the dollar rose to session highs against the yen, with USD/JPY advancing 0.58% to 100.16.

Market sentiment was boosted after reports on industrial production and retail sales from China added to signs that the world’s second largest economy is recovering from a slowdown.

Data released on Tuesday showed that Chinese retail sales rose unexpectedly in August, while Chinese industrial production rose more than forecast last month.

Investor confidence was also bolstered after U.S. President Barack Obama said he would put plans for a military strike against Syria on hold if the country agrees to a Russian proposal to place its chemical weapons under international control.

The dollar remained on the back foot after the latest U.S. nonfarm payrolls report on Friday showed that the economy added slightly fewer jobs than expected in August.

The soft data raised some doubts over whether the Federal Reserve will start to unwind its USD85 billion-a-month asset purchase program at its upcoming policy meeting on September 17-18. 

Elsewhere, the euro slipped slightly lower against the dollar, withEUR/USD sliding 0.10% to 1.3240.

In the euro zone, data on Tuesday showed that the recession in Italy is deeper than had been previously thought.

The economy contracted by 0.3% in the second quarter, worse than the initial estimate of a 0.2% contraction, bringing the annualized rate of contraction to 2.1% from the initial estimate for a  2% contraction.

The pound was steady close to three-month highs against the dollar, with GBP/USD inching up 0.09% to 1.5708.

The dollar pushed higher against the Swiss franc, with USD/CHF rising 0.23% to 0.9345.

Elsewhere, the greenback was broadly lower against its Australian, New Zealand and Canadian counterparts, with AUD/USD climbing 0.54% to 0.9277, NZD/USD gaining 0.34% to 0.8043 and USD/CAD slipping 0.14% to 1.0362.

The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.14% to 81.95.