(Removes erroneous euro/Swedish crown rate)
* Dollar having worst day vs euro since mid-July
* Strong Chinese data boosts risk appetite, Aussie gains
* No yen intervention, focus shifts to Japan party race
* Longer-term concerns linger, Swiss franc up vs dollar (Updates prices, adds comment, Swiss, Swedish exchange rates)
By Steven C. Johnson
NEW YORK, Sept 13 (Reuters) - The dollar headed for its biggest daily slide against the euro in two months on Monday as strong Chinese data boosted currencies of countries like Australia that are big sellers to China.
Thanks to recent better-than-expected U.S. employment data and new global banking rules, investors began the week in an upbeat mood about the world economy. New data showing Chinese factories ramped up production last month and money growth beat expectations backed the view markets had grown too gloomy in their outlook.
Investors were also cheered when regulators agreed on new capital requirements for banks on Sunday, with lenders given more time than expected to comply with them.
That helped drive the euro above $1.28 -- it fell below $1.26 in late August -- leaving it on track for its best daily gain since July 15. The high-yielding Australian dollar reached a five-month peak of $0.9362. Australia is a top supplier of raw materials for China.
"There's no doubt that risk appetite has returned, and the strong Chinese data reduces the risk of a global double-dip recession," said Matthew Strauss, senior strategist at RBC Capital Markets in Toronto.
The euro was up 1.5 percent at $1.2860. Earlier gains triggered automatic buy orders around $1.2750, and its break of its 55-day moving average at $1.2815 drove it still higher. It rose 1 percent to 107.80 yen.
The euro also got a boost after the European Commission said it expects the euro zone economy to grow almost twice as fast in 2010 as previously thought.
Analysts said the euro was targeting $1.2920, a level it failed to breach earlier this month, but warned it would remain within its recent range unless it topped that level.
But analysts said longer-term worries remain about U.S. growth and the health of the euro zone banking sector. That pushed the dollar down 1 percent to 1.0088 Swiss francs. The franc is a traditional safe haven currency.
"People are getting short-term encouragement from recent data but still have long-term concerns," said Brian Dolan, chief strategist at Forex in Bedminster, New Jersey.
The Swedish crown, meanwhile, hit a 2010 high against the euro, driven partly by expectations that the Riksbank will hike rates before the European Central Bank.
YEN SLIPS, CHINA IN FOCUS
The dollar fell 0.4 percent to 83.81 yen, near a 15-year low around 83.34 yen. That kept investors on alert to see whether Japanese authorities would intervene to weaken the yen ahead of a ruling party leadership vote Tuesday.
If challenger Ichiro Ozawa ousts Prime Minister Naoto Kan, analysts expect the dollar to rise against the yen, as Ozawa has advocated strong intervention to curb the yen's strength.
Traders said bids from Japanese importers around 83.50-80 yen were offset by exporter offers reported above 84.20 yen.
Were Japan to intervene, it is expected to act alone, with U.S. authorities more focused on persuading China to allow more yuan appreciation.
Treasury Secretary Timothy Geithner was due to discuss China's exchange rate practices before Congress this week.
In remarks published in the Wall Street Journal on Monday, he said China has made "very, very little" progress on letting the exchange rate reflect market forces.
China loosened the yuan's peg against the dollar in June, but the dollar has only fallen about 1 percent since then.
(Additional reporting by Jessica Mortimer in London; Editing by Andrew Hay)