FOREX-Dollar sinks vs Swiss franc, yen on data, debt woes

* Greece uncertainty, Spain downgrade risk weigh on euro

* No breakthrough in U.S. debt talks, vote pushed back

* U.S. 2nd-quarter GDP data paints dismal economic picture
(Recasts, adds quote, U.S. data, updates prices, changes
byline, dateline; previous LONDON)

By Gertrude Chavez-Dreyfuss

NEW YORK, July 29 (Reuters) - The U.S. dollar plunged to
all-time lows against the Swiss franc and four-month troughs
versus the yen on Friday as data showing lackluster U.S. growth
and debt worries on both sides of the Atlantic prompted
investors to seek refuge in traditional safe havens.

The greenback, however, gained against commodity-linked
currencies such as the Australian, Canadian and New Zealand
dollars, which typically struggle when there is heightened risk
aversion.

Gains in the U.S. dollar, Swiss franc and yen accelerated
after data was released showing the U.S. economy grew at a 1.3
percent annual rate in the second quarter, well below the
expected 1.8 percent pace. First-quarter growth was also
revised sharply lower, to 0.3 percent from 1.9 percent. See
[ID:nCAT005481].

"Today's disappointing U.S. GDP data confirms what we have
suspected for some time: the end of QE2 will do to the U.S.
economy what a lawnmower does to green shoots," said Douglas
Borthwick, managing director at Faros Trading in Stamford,
Connecticut.

He was referring to the second round of 'quantitative
easing' or Treasury bond buying by the Federal Reserve to try
to stimulate the economy.

Faros reiterated his view that with the end of quantitative
easing in June and government spending in check given the debt
negotiations, the U.S. economy could benefit from a weaker
dollar, at least until exports can recover and the U.S. fiscal
position can be put back on track.

In early New York trading, the dollar fell to 0.78991 franc
CHF=EBS on trading platform EBS and was last at 0.79139, down
1.3 percent on the day.

The euro slid to record lows against the Swiss unit as
well, to 1.13131 francs EURCHF=EBS. It last traded at 1.13470
francs, down 1.2 percent.

The dollar was down 0.7 percent against the yen at 77.200
yen JPY=EBS, having fallen to a four-month low of 77.120.
Japanese Finance Minister Yoshihiko Noda warned about the
strong yen, saying he would consider how long Japan could
ignore current exchange rate moves without acting.
[ID:nT9E7IE01O]

Expectations of possible intervention and position-squaring
ahead of the weekend prevented a further rise in the yen. The
record low for dollar/yen was 76.250.

U.S. authorities appeared as far as ever from reaching a
cross-party compromise to raise the $14.3 trillion U.S. debt
ceiling, while euro zone concerns grew on talk Greece might
miss its next loan tranche payment and a Moody's warning that
it might downgrade Spain. [ID:nL6E7IT0DR]

A Dow Jones report that the euro zone's bailout fund may
not be in a position to lend to Greece in September also
weighed on the euro. A Eurogroup spokesman later said Greece
would get the money and the tranche would be paid from
bilateral loans rather than the EFSF. [ID:nL6E7IT0DR]
[ID:nLDE76S0VJ]

In the United States, analysts have said that even if a
last-minute deal to lift the U.S. debt limit is struck before
the Aug. 2 deadline, a rating downgrade appears likely without
a comprehensive plan to cut the deficit. A cut would raise U.S.
borrowing costs, hurting an already weak economy, and rattle
investors.

In the options market, dollar/yen implied volatilities
climbed. One-month vols JPY1MO= traded around 10.97 percent,
up from 10.10 percent on Thursday. Dollar/yen risk reversals, a
measure of the premium required to hold a put or a call option
in a currency pair, also edged out in favour of yen calls with
the one-month JPY1MRR=ICAP at 1.9 vols versus 1.8 Thursday.

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Full coverage of U.S. budget and debt [ID:nUSBUDGET]

SCENARIOS-Obama options if no debt deal [ID:nN1E76O0QG]

ANALYSIS-Debt crisis big test for Boehner[ID:nN1E76Q1PW]

BREAKINGVIEWS-Investors too complacent [ID:nN1E76Q0EQ]

Graphics package r.reuters.com/nud82s

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(Editing by James Dalgleish)