* Dollar index lower, dlr/yen back below 84 yen
* Euro rises, boosted by rally in the euro/Swiss franc cross
* China data, Dubai World deal supports commodity currencies
(Adds detail, updates prices)
By Anirban Nag
LONDON, Sept 10 (Reuters) - The dollar gave up most early gains against the yen on Friday, heading towards 15-year lows and keeping prospects for yen intervention alive, while the Swiss franc stumbled as investors sold safe-haven currencies.
News that Dubai World [DBWLD.UL] had reached a deal to restructure liabilities helped ease recently renewed fears about Dubai's debt woes and boosted risk demand. That pushed the euro up 1 percent on the day versus the Swiss franc, while a rise in Chinese imports boosted commodity currencies including the Australian dollar.
The dollar fell 0.2 percent against a basket of currencies
<.DXY> <=USD>, having failed to hold above the index's 55-day
moving average at 82.80. Against the yen, the dollar was off its
session highs of 84.28 yen
The dollar rose earlier in the session, helped by an increase in U.S. Treasury yields on Thursday on U.S. jobs data.
"There has been a moderate improvement in risk appetite which is seeing the dollar fall," said Daragh Maher, deputy head of global foreign exchange research at Credit Agricole CIB. "But it is still very quiet there and it's unlikely to lead to any trend."
Currency markets shrugged off worries about European banks
and news of a possible 9 billion euro capital raising by
Deutsche Bank
The euro was up 0.25 percent at $1.2727
It hit the day's high of 1.3050 Swiss francs
Traders cited Swiss banks selling the safe-haven franc
against the euro, dollar and other currencies. The dollar rose
nearly 1 percent on the day to 1.0249 francs
But strategists remained sceptical about the euro's gains, given the euro zone periphery's debt worries and renewed concern this week about the region's banking sector.
"It is a risk-on environment which is helping the euro, but clearly structural problems remain given widening spreads and well known problems about its banking sector," said Simon Derrick, head of currency research at Bank of New York Mellon.
His bank's data showed demand was not recovering for assets in peripheral euro zone markets like Greece, Italy and Portugal.
The Swedish crown rallied to a three-year high of 9.2025
crowns per euro
LEADERSHIP RACE TO SWAY YEN
The shift away from safe-haven currencies also kept the yen
under pressure against the higher-yielding currencies and the
euro
The dollar hit a 15-year low of 83.34 yen this week,
intensifying speculation that Japan might step in to curb yen
gains if the move accelerated towards 80 yen.
TAKE-A-LOOK on Japan politics [nPOLJP]
Attention was turning to a ruling party leadership race on Sept. 14 in which Kan faces a challenge from powerbroker Ichiro Ozawa.
Surveys give Kan a slight lead, but a Reuters poll showed a win by Ozawa in the vote, which would also decide who is prime minister, would likely give a short-term boost to stocks but weaken Japanese government bonds and the yen. [ID:nTWKAKE617]
Ozawa has said Japan should intervene to weaken the yen, and while some analysts say intervention would be difficult without support from Washington, others say Tokyo under Ozawa would be more likely to take action if the yen strengthens.
(Additional reporting by Naomi Tajitsu; Editing by Susan Fenton)