* Euro helped by muted stock markets
* Commodity currencies recover after two-day oil sell-off
* Yuan fixed lower for fourth day running (Updates prices, adds quotes)
By Patrick Graham
LONDON, Dec 9 (Reuters) - The euro rose on Wednesday back towards one-month highs hit after last week's unexpectedly cautious policy moves by the European Central Bank, while a pause in a brutal oil market sell-off let commodity-linked currencies regain a foothold.
Chinese authorities fixed the onshore rate of the yuan lower for the fourth day running, adding to a growing conviction in markets that Beijing will knock several more percentage points off its value next year as part of efforts to prop up slowing growth.
Austrian central bank chief Ewald Nowotny blamed inflated market expectations for the sharp reaction to last week's ECB, giving little insight into whether German voices at the bank held off more aggressive easing of policy.
The ECB's willingness to do more next year is becoming as important for the value of the euro against the dollar as the pace at which the Federal Reserve will raise interest rates after an expected first move next week.
"There's a generally more risk-averse tone this morning and we think that may push the euro towards the mid-1.09s," Western Union currency hedging manager Tobias Davis said.
"However, the closer to 1.10 we go, the more I would be inclined to sell it. Divergence will be the key theme throughout 2016. However, we need to get through Dec. 16 first," he added, referring to the conclusion of the Fed's two-day policy meeting.
The euro gained about a quarter of a percentage point to reach $1.0920 in morning trade in London. The yen was also firmer against the dollar at 122.69 yen, pushing the dollar index against a basket of currencies down 0.3 percent to 98.161.
Most of the action this week has been confined to commodity currencies after OPEC members failed on Friday to agree on an oil production ceiling, triggering a renewed sell-off in oil.
The slide has dampened investors' risk appetite, lending support to low-yielding currencies such as the euro and the yen this week, though their moves have been relatively modest.
"Obviously over the next three to six months, with rates in Europe low, oil under pressure and U.S. rates going up, short euro against the dollar is the trade, but the mileage is limited," said Peter Jerrom, a trader with brokerage Sigma in London.
"We see the euro minimally lower into the end of the year, but barring a surprise no-move from the Fed next week, people are pretty much done for the year."
Currencies of major commodity producers, including Australia , Canada and Norway, were all steadier, though the Aussie dollar was still down 0.3 percent on the day at $0.7197 and remains comfortably above long-term lows around 69 cents hit in September.
"The last couple of days has been people reloading on dollar longs against the commodity bloc," BNP Paribas strategist Michael Sneyd said.
"We like commodity currencies as a way to play the Fed next week and the Aussie has not fallen as much as others, so it looks susceptible to more losses. There's at least another couple of big figures there (it can fall)." (Editing by David Goodman)