The safe-haven yen and Swiss franc slid on Tuesday, as growing signs the United States and China are inching closer to a trade deal boosted risk appetite and spurred investors to seek higher-yielding currencies.

On the flip side, trade-oriented currencies including the Australian dollar surged, with the Chinese currency climbing to a three-month high against the greenback.

A decision by the Chinese central bank to trim lending rates by only 5 basis points also increased overall risk-taking.

China is pushing US President Donald Trump to remove more tariffs imposed in September as part of a "phase one" US-China trade deal, which is expected to be signed later this month, people familiar with the negotiations said.

"The prospects that the US-China deal could include some rolling back of existing US tariffs helped underpin risk appetites," said Marc Chandler, chief market strategist at Bannockburn Global Forex in New York.

In mid-morning trading, the US dollar rose 0.3% against the yen to 108.94 yen, and was up 0.4% versus the Swiss franc at 0.9918.

The yen and Swiss franc tend to strengthen in times of geopolitical tension and financial stress.

Gains against the yen and Swiss franc pushed the dollar index up 0.3% to 97.774.

The yuan traded in the offshore market jumped to its strongest level since Aug. 5 at 6.9838. The onshore yuan also posted its strongest close since Aug. 2.

The euro, however, was down 0.4% against the dollar at $1.1091.