* U.S. economy adds 148,000 jobs, fewer than expected * Data drives expectations of Fed maintaining stimulus * Labor participation rate adds to expectations on stimulus By Gertrude Chavez-Dreyfuss NEW YORK, Oct 22 (Reuters) - The dollar fell across the board on Tuesday after the government reported the U.S. economy added a disappointing 148,000 jobs last month, cementing expectations that the Federal Reserve is likely to keep its stimulus plan unchanged for the rest of the year. The greenback dropped to a near two-year low versus the euro, a 20-month trough against the Swiss franc, and a 4-1/2-month low versus the Australian dollar. Against a basket of currencies, the dollar hit an eight-month low. Economists were expecting U.S. job gains of 180,000 in September, data for a period that preceded the 16-day government partial shutdown in October. With the shutdown expected to have damaged the U.S. economy, the conviction that the Fed will not reduce its asset buying anytime soon became even more entrenched. "Is the Fed getting tired of being right? Today's underperforming jobs number fully justifies September's cautious FOMC," said Joseph Trevisani, chief market strategist at WorldWideMarkets in Woodcliff Lake, New Jersey. "Full-bore quantitative easing will probably be with us through the first quarter and speculation for an increase may be no further than another weak payroll." The unemployment rate did dip to 7.2 percent last month, the lowest level since November 2008, but the expected toll of the government shutdown on the economy eclipsed any signs of strength. Economists estimated that the government shutdown shaved as much as 0.6 percentage point off annualized fourth-quarter gross domestic product, through reduced government output and damage to both consumer and business confidence. The labor participation rate in September held fast at a 35-year low, unchanged at 63.2 percent. "A 35-year low in the participation rate indicates that the recent improvement in the unemployment rate has been influenced in no small way by discouraged workers leaving the labor force," said Michael Woolfolk, global market strategist, at BNY Mellon in New York. "This report clearly reduces the likelihood of tapering." In midday New York trading, the euro hit a high of $1.3785 against the dollar, its strongest level since mid-November. It was last at $1.3781, up 0.7 percent. The euro's gains pushed the dollar index, a gauge of the dollar's value against six major currencies, to its weakest level in eight months at 79.223. The index last traded at 79.263, down 0.4 percent. Against the yen, the dollar fell as low as 97.86. It last traded at 98.08 yen, down 0.1 percent on the day. Following the September jobs report, futures prices suggested that the Fed will raise interest rates no earlier than April 2015, giving a 54 percent probability of an increase that month, according to CME Group's Fed Watch. Fed Watch generates probabilities based on the price of Fed funds futures traded at CME Group Inc's Chicago Board of Trade. Before the report, traders were giving a 59 percent probability for an April 2015 rate rise. Chicago Fed President Charles Evans said on Monday it would be "tough" for the U.S. central bank to have enough confidence in the economy by its December meeting to start scaling back stimulus. The fiscal deal clinched last week by U.S. lawmakers only restored government funding until Jan. 15. The Australian dollar climbed to a 4-1/2-month peak against the greenback at US$0.9730. It has retraced half of its April-to-August fall. Morgan Stanley's head of European FX strategy, Ian Stannard, said he expects the Australian dollar to rise toward US$0.98 in the near term as it benefits from higher interest rates and because Australia has stronger links to China than to the United States. The U.S. dollar also fell against the Swiss franc, hitting a 20-month low of 0.8941 franc. It was last at 0.8944 franc, down 0.8 percent on the day.