* Dollar stands tall, euro sags as Italian political woes bite
* Fundamentals also seen lifting dollar after Fed rate hike
* US non-manufacturing ISM index release eyed for near-term cues
* Graphic: World FX rates in 2018 tmsnrt.rs/2egbfVh
By Shinichi Saoshiro
TOKYO, Oct 3 (Reuters) - The dollar stood near a one-month high against its peers on Wednesday as concerns as political wrangling over Italy’s budget plan rattled market sentiment and weighed on the euro.
The greenback rose as the euro slumped after a senior Italian lawmaker said most of the country’s problems would be solved if it returned to a national currency of its own.
The euro was little changed at $1.1550 in Asian trade after retreating to a six-week low of $1.1505 overnight.
The Italian lawmaker, Claudio Borghi, later back-pedalled on his comments. Italian Prime Minister Giuseppe Conte also said the euro was “unrenouncable.”
Still, that was not enough to prompt a strong bounce for the euro, which has been stung recently by worries over heavily indebted Italy’s budget situation.
The dollar index against a basket of six major currencies was steady at 95.468 after scaling 95.744 overnight, its highest since Sept. 4 as Italian concerns chilled investor risk sentiment in the broader markets and raised demand for the safe-haven U.S. currency.
The yen, another safe-haven currency, also gained against peers such as the euro, dollar and Australian dollar.
The greenback last stood at 113.62 yen, having pulled back from an 11-month high of 114.06 reached on Monday.
“The slip by European currencies in the wake of the latest Italian concerns has lifted the dollar. But a larger component of the dollar’s recent rise comes from fundamental factors fortified after the Fed’s rate hike,” said Junichi Ishikawa, senior FX strategist at IG Securities in Tokyo.
The dollar index has advanced about 1.4 percent since last Wednesday, when the Federal Reserve raised interest rates as expected and said it foresees another rate hike in December, three more next year and one in 2020.
“U.S. data due later today such as the non-manufacturing ISM index and Friday’s jobs report will provide a chance to see if the economy is performing in line with the Fed’s views,” Ishikawa said.
The pound was little changed at $1.2981 after dropping on Tuesday to $1.2941, its weakest since Sept. 10, as conflicts over Prime Minister Theresa May’s Brexit plan escalated.
The Australian dollar was steady at $0.7189 after sliding the previous day to a two-week trough of $0.7162. The Aussie, sensitive to shifts in global risk sentiment, was hit as equities sold off on worries over Italy.
In the near term, Australian dollar risks probably remain to the downside, given the confluence of the recent Fed meeting, the U.S. review of China tariffs and Italy budget risks, currency strategists at Westpac wrote. (Reporting by Shinichi Saoshiro Editing by Eric Meijer)