Dollar hits one-month high vs yen as risk aversion subsides
* Dollar at 1-month high vs yen as worries about Syria ease
* China mfg PMI also helps risk sentiment
* Mkt focus on U.S. jobs report, ECB, BoE decisions this week
LONDON, Sept 2 (Reuters) - The dollar rose to a one-month high against the safe-haven yen on Monday as worries about a military strike against Syria diminished, while commodity currencies edged higher in the wake of upbeat Chinese data.
The dollar was up 1.2 percent 99.38 yen, its highest since Aug. 2 and pulling well away from last week's trough of 96.81 yen. The euro rose 1.2 percent to 131.27 yen.
The yen, which tends to benefit in time of market turmoil, was recently buoyed as investors avoided risk on escalating tensions around Syria and dumped emerging market assets as they braced for the Federal Reserve to begin scaling back stimulus.
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 similar to that seen in the British Parliament last week.
The delay has eased the market's nervousness to some extent which has reduced the safe haven demand for the yen.
"We see an improvement in investor risk sentiment on Syria. Also the China PMI data is a key driver as it is helping ease investor pessimism over the China growth outlook," said Lee Hardman, currency economist at Bank of Tokyo Mitsubishi.
"All this is encouraging some renewed risk seeking behaviour by investors this week," he said adding that he expects the dollar to test the 100 yen level in coming sessions.
Commodity currencies, like the Australian dollar were better bid thanks to the encouraging Chinese data, which showed factory activity expanded at the fastest pace in more than a year in August.
The Aussie was up 0.9 percent at $0.8981.
The latest Commodity Futures Trading Commission data showed currency speculators increased their bets in favour of the dollar and were bullish on the euro.
The euro was steady at $1.3215 against the dollar.
Euro zone survey data released on Monday indicated that factory activity rose at its fastest pace in more than two years in August.
With the focus on Syria diminishing a little, currency moves will likely be dictated by the barrage of economic data this week, like the U.S. non-farm payrolls numbers on Friday, ahead of which the European Central Bank and the Bank of England hold policy meetings.
ECB policymakers are likely to reiterate their pledge that rates will stay low to aid an economic recovery.
Despite the myriad of upcoming events, it all boils down to one question: when will the Fed '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."