FOREX-Euro lower against the dollar as debt woes weigh

* Euro touches lowest against the dollar since May

* Risk aversion on euro zone debt woes

* U.S. report shows employers cut jobs in January

* SNB seen selling francs in Asia, SNB, BIS decline comment

NEW YORK, Feb 5 (Reuters) - The euro on Friday fell to its lowest level against the dollar since May on rising risk aversion as the cost of insuring the debt of some euro zone nations against default hit record highs on worries over their fiscal positions.

The single European currency had earlier gained against the Swiss franc on suspected intervention by the Swiss National Bank or an authority at the behest of the bank. [ID:nWEB8427]

The dollar was bolstered against both the euro and yen on Friday after a report showed U.S. employers were still cutting jobs in January even as the U.S. unemployment rate fell.

"The situation with the euro zone will keep overshadowing the economic developments in the United States, including today's payrolls report," said Vassili Serebriakov, currency strategist at Wells Fargo Bank in New York. "There's no easy way out for the euro zone, and it's just not going anywhere. It will keep pressuring the euro."

In early New York trade, the euro EUR= fell 0.3 percent on the day at $1.3687 after falling as low as $1.3649, according to Reuters data, its weakest since May 2009.

On the week, the euro is on track to post a 1.1 percent fall, its fourth consecutive week of losses. The single European currency has tumbled around 10 percent from its December 2009 high around $1.5140.

Fears about the fiscal health of peripheral euro zone economies mounted, pushing up the cost of insuring Greek, Portuguese and Spanish government debt against default to record highs, according to monitor CMA DataVision. [ID:nLDE6140LZ]

The yield spread between Greek and German 10-year government debt expanded from the previous day because of uncertainty about how Athens will service its debts, prompting traders to dump the euro in favor of the perceived safety of the dollar.

Ongoing fiscal concerns in the euro zone cranked up implied volatility in the currency options market, with one-week euro/dollar vols EURSWO= trading around 14 percent from 11.85 percent on Thursday.

Analysts said such a change on the day had not been seen since Lehman Brothers filed for bankruptcy in autumn 2008.

YEN MOVES

Against the yen, the single European currency EURJPY= fell to a session low of 122.00, according to Reuters data in New York, hovering in range of a low touched on Thursday not seen since early 2009.

The dollar was up 0.5 percent against the yen at 89.44 yen JPY= after climbing as high as 89.89 yen after the U.S. non-farm payrolls report.

Trading of the dollar against the yen was volatile both before and after the data, with a sharp move higher before the release, a wild swing back and then another move higher.

"We saw dollar-yen have a psychotic reaction," said Boris Schlossberg, director of FX Research at GFT in New York. "People were fronting it higher but then saw the negative number and brought it way down."

The dollar index .DXY, a calculated measure which tracks the greenback's performance against a currency basket, climbed to 80.435, its strongest since July 2009. It last traded up 0.4 percent at 80.223.

The euro EURCHF= traded at 1.4705 Swiss francs, pulling back from a high of 1.4905 francs hit on trading platform EBS EURCHF=EBS in Asian trade on suspected intervention by the SNB.

Investors awaited a meeting of Group of Seven rich nations' central bankers and finance ministers in Canada starting later in the day, although analysts said it was unlikely that currencies would be addressed in the final communique. (Additional reporting by Vivianne Rodrigues and Steven C Johnson; Editing by Padraic Cassidy) (Reporting by Nick Olivari)