* No jobs growth in Aug; expectations of Fed stimulus rise
* Swiss franc rises, euro slumps on risk aversion
* SNB absent from forward market, politicians give support (Updates prices, adds quotes)
By Julie Haviv
NEW YORK, Sept 2 (Reuters) - The U.S. dollar slid against the Swiss franc and yen on Friday as bleak jobs data raised expectations the Federal Reserve may soon embark on another round of bond-buying, a measure that could drag the dollar down further.
The Swiss franc extended already impressive gains for the week as concerns about the euro zone debt crisis and a gloomy economic outlook prompted safe-haven buying by fund investors, who tested the Swiss National Bank's resolve.
The U.S. Labor Department on Friday reported there was no jobs growth in August, the worst performance in nearly a year. The Labor Department also revised down its figures on jobs growth in both June and July. [ID:nOAT004865]
"The bottom line is that the worse the data is, the more likely it is we get additional QE," said Brian Dolan, chief strategist at Forex.com in Bedminster, New Jersey.
"That will keep the dollar heavy against the yen and Swiss franc, and now we're even seeing it weaken a bit against the euro and sterling."
The U.S. Federal Reserve pumped about $2.3 trillion into the economy through two rounds of bond buying, known as quantitative easing. The programs were tantamount to printing money and therefore diluted the value of the dollar.
The increased expectations of a new round of stimulus by the Fed when its policy-setting committee next meets on Sept. 20-21 was seen as continuing to weigh on the dollar.
"With the number coming in at zero, and the prior (month) revised 32,000 lower, the Fed has gained greater political ability to enact a version of QE3 at their meeting in September," said Douglas Borthwick, managing director at Faros Trading in Stamford, Connecticut. "We see this as terrifically bearish for the dollar, bullish for gold and bullish for euro/dollar.
"QE3 will accomplish two things: assets in the U.S. will be further inflated, and the weaker dollar will help U.S. multinationals as their foreign earnings will inflate on the weaker dollar," Borthwick said. ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ For graphic on U.S. non-farm payrolls: r.reuters.tes.53s ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
Risk aversion caused investors to shun the euro, fueled by worries about Greece meeting its deficit targets, concerns over Germany passing plans to reform the European bailout fund this month, and Italy's backtracking on budget austerity.
The euro EUR= traded down 0.4 percent at $1.4208, a three-week low.
The Swiss franc pared gains after top Swiss politicians said they fully support the steps the SNB has taken. [ID:nWEA2973]
After several weeks of activity last month, there was no sign of the Swiss National Bank in the Swiss forward market to reinject liquidity and stem strength in the currency, whose stellar performance is a problem for its exporters, although traders remained on alert for more measures.
SNB injections of liquidity last month pushed Swiss deposit rates into negative territory, forcing the currency to retreat from record highs.
"People are getting used to the fact that negative deposit rates are not much of a deterrent to the market if the Swiss franc appreciates sharply," said Chris Turner, head of forex strategy at ING. "Flows are increasingly a function of safety and not return."
The euro was last down 1.5 percent to 1.1174 francs EURCHF=, extending a rapid dive from nearly 1.2000 francs on Monday and putting the single currency on course for its biggest ever weekly fall. (Additional reporting by Steven C. Johnson, Nia Williams and Neal Armstrong; Editing by Leslie Adler)