(Corrects incorrectly named Eurozone PMI in fourth paragraph)
* USD off lows but wobbly as market braces for political events
* Dollar fares better against Aussie, loonie after oil slide
By Shinichi Saoshiro
TOKYO, Sept 26 (Reuters) - The dollar wobbled against the yen and euro on early on Monday, cautiously held in a narrow range ahead of the impending first debate between U.S. presidential candidates that could determine the currency’s near-term direction.
The greenback was off lows versus the yen and euro touched late last week after long-term rate hike expectations were tempered following the Sept. 20-21 Federal Reserve policy meeting, but it remained on shaky ground as market focus shifted from monetary to political risk.
The dollar was down 0.2 percent at 100.800 yen. It saw a one-month low of 100.100 on Thursday before pulling back to as high as 101.250 towards the end of last week.
The euro nudged up 0.1 percent to $1.1238, adding to Friday’s modest gains made after the release of a relatively upbeat euro zone purchasing managers’ index (PMI). The common currency briefly rose to as high as $1.1258 on Thursday.
The market awaited the debate between Democrat Hillary Clinton and Republican Donald Trump, the first of three face-to-face contests, to be held at 0100 GMT on Tuesday.
“If the debate ends in favour of Trump and adds to his support, we may see dollar/yen slip on risk aversion. Trump has strongly backed a weaker dollar, which is likely to retreat particularly against the yen if he is seen to have taken the lead,” said Shin Kadota, chief Japan FX strategist at Barclays in Tokyo.
The dollar, on the other hand, fared better against the Australian and Canadian dollars as a slide in oil prices weighed on the commodity-linked currencies.
The Australian dollar was little changed at $0.7622 after losing about 0.25 percent on Friday. The Canadian dollar was also steady at C$1.3152 to the dollar after sliding sharply on Friday from a peak around C$1.3000.
Sterling crawled up 0.1 percent to $1.2980, posting a small bounce after dropping 0.9 percent on Friday, when it touched a five-week low near $1.2900 on worries over Britain’s exit from the European Union. (Reporting by Shinichi Saoshiro; Editing by Eric Meijer)