* USD off lows but wobbly as market braces for political events
* Dollar fares better against Aussie, loonie after oil slide (Updates prices, adds details and quotes)
By Shinichi Saoshiro
TOKYO, Sept 26 (Reuters) - The dollar wobbled against the yen and euro 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 it 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 0.1 percent at 100.860 yen JPY= . 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 $1.1234 EUR= , adding to Friday's modest gains made after the release of relatively upbeat euro zone flash composite purchasing managers' index. 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 (LON:BARC) in Tokyo.
While both Clinton and Trump are seen favouring a weaker dollar, some fear a Trump victory could expose the U.S. world's largest economy to greater negative shocks.
"What's concerning is whether the dollar can retain its number one safe-haven status if greater support for Trump begins clouding the economic outlook," said Bart Wakabayashi, head of Hong Kong FX sales at State Street Global Markets.
"The dollar may not be able to defend its number one spot if the economic outlook turns negative, handing its top safe-haven place to the yen."
The dollar, on the other hand, fared better against the Australian and Canadian dollars after crude oil prices tumbled on Friday and weighed on the commodity-linked currencies.
The Australian dollar extended Friday's losses and was last down 0.1 percent at $0.7613 AUD=D4 . The Canadian dollar was steady at C$1.3172 to the dollar CAD=D4 after sliding sharply on Friday from a peak around C$1.3000.
Brent crude was up 0.7 percent LCOc1 after dropping nearly four percent on Friday amid signs Saudi Arabia and Iran were making little progress in achieving preliminary agreement to freeze production. O/R
Sterling crawled up 0.1 percent to $1.2984 GBP=D4 , 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.