* 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
(Recasts, adds quotes, updates prices)
By Anirban Nag
LONDON, Sept 10 (Reuters) - The dollar gave up most of its gains versus the yen on Friday, heading towards 15-year lows and keeping intervention prospects alive, while the euro rallied against the Swiss franc as investors sold safe-haven currencies.
Chinese trade data which showed higher-than-expected imports for August along with news that Dubai World had reached a deal to restructure liabilities boosted risk demand and pushed currencies such as the Australian dollar higher.
The dollar fell 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 JPY=, falling to 83.90 yen.
It 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 its unlikely to lead to any trend."
The euro was up 0.25 percent at $1.2727 EUR=, helped mostly by its gains against the Swiss franc.
It rallied more than 1 percent against the franc, which came under selling pressure due to the rise in risk appetite. The euro EURCHF= hit the day's high of 1.3050 francs, according to Reuters data. Traders cited Swiss banks selling the safe-haven franc against the euro, dollar and other currencies.
But strategists remained sceptical about the euro's gains, given the euro zone periphery's debt worries and banking sector problems surfacing again.
"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 markets like Greece, Italy and Portugal.
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 EURJPY=R. But the yen managed to pare some of its losses against the dollar as Japanese authorities kept up their rhetoric about intervention in the currency market.
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. Prime Minister Naoto Kan reiterated on Friday that authorities would take decisive steps on the yen if needed. <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ PDF presentation on the yen: r.reuters.com/mam52p 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.
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.
"So the chances of intervention will rise as compared to the period under Kan," said Masafumi Yamamoto, chief FX strategist Japan at Barclays Capital in Tokyo.
(Additional reporting by Hideyuki Sano in Tokyo)