TOKYO: The US dollar started on a steady footing on Tuesday, as foreign exchange markets braced for a batch of Chinese economic indicators amid lingering investor worries over signs of a slowdown in Asia's economic powerhouse and global growth.
The China data could influence investors' perception on the US Federal Reserve's monetary policy track, and by extension, the fate of the US dollar.
"Because slowdown in China is one major reason behind investor concerns on global growth, the data is likely to affect sentiment on the global economy," said Shin Kadota, chief FX strategist in Barclays' Tokyo branch.
A raft of Chinese economic data is due later in the day, including GDP for the July-September quarter, industrial output and retail sales for September.
Growth in the world's second largest economy is expected to slow to 7.2 percent from a year earlier, which would be its weakest performance since early 2009.
The dollar index was steady at 85.065, having dipped slightly on Monday, extending its slide from a four-year peak hit at the beginning of this month.
The dollar has lost ground as concerns about slowing global growth prompted investors to trim bets that the Fed will raise interest rates soon after an expected end in its stimulus later this month.
The US dollar traded at 106.94 yen, having failed to maintain gains made early on Monday on improved risk appetite following news that Japan's giant public pension fund will increase allocations to Tokyo stocks.
Should Chinese data cast doubts on the strength of Asia's largest economy and hurt broad risk appetite, the yen should stand to gain further, analysts said.
The Australian dollar - often seen as a liquid proxy of China's growth prospects given Australia's large trade exposure to China - could see some big reaction to the Chinese data.
The currency traded at $0.8789. Ahead of Chinese data, the market will also look to the minutes of the Australian central bank's policy meeting.
The euro traded at $1.2794, having maintained its 0.3 percent gains on Monday.
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