* U.S. debt and downgrade worries push dollar index to near 3-mth low * Markets wary of Japan intervention as dlr/yen falls to 4-mth low * Dollar hits record low vs Swiss franc; Aussie flies on CPI data * Euro hampered by renewed euro zone debt nerves By Jessica Mortimer LONDON, July 27 (Reuters) - The dollar hit a record low against the Swiss franc and a four-month low against the yen on Wednesday and was poised for further losses as talks aimed at averting a U.S. debt ratings downgrade or default remained deadlocked. With Democrat and Republican lawmakers still unable to agree on a plan to raise the government's $14.3 trillion debt ceiling before an Aug. 2 deadline, the dollar stayed close to a near three-month low versus a currency basket. "As long as the uncertainty over the discussions on the U.S. debt ceiling continue it's a clear dollar negative. No one wants to hold dollars at the moment," said Niels Christensen, currency strategist at Nordea in Copenhagen. The Swiss franc and yen gained as investors sought perceived safer alternatives to the dollar, raising concerns the Japanese authorities may intervene to stem the yen's strength. Finance Minister Yoshihiko Noda repeated on Tuesday his mantra about closely watching "one-sided" moves, while sources familiar with the matter said Japanese policymakers see solo market intervention as an increasingly viable option. Analysts viewed intervention as unlikely given that dollar/yen falls have been orderly but said officials were likely to ratchet up the rhetoric and fear of action may help limit the yen's rise. Japan intervened to curb the yen in March. The dollar fell to a four-month low of 77.57 yen , just shy of a reported option barrier at 77.50. It was last down 0.1 percent at 77.80 yen. "The yen is one of the least ugly currencies at the moment," said Bank of New York Mellon analyst Neil Mellor, adding that Japan's substantial external assets and a relatively secure banking sector made the yen "a good bet". He said BNYM's custodial flows data showed net purchases of the yen have been rising since early May, while traders said implied dollar/yen volatilities were edging higher as the yen moved nearer to its record low of 76.25 hit in March. Against the Swiss franc , the dollar hit a fresh record low of 0.7996 on the EBS trading platform, while the Australian dollar surged 1 percent to a 29-year high of U.S.$1.1081 , helped by strong Australian inflation data. Analysts polled by Reuters expect the United States will probably lose its AAA credit rating from at least one major rating agency and believe the wrangling over the debt ceiling has already damaged the economy. However, most in the market held out hope the log jam could still be broken. ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ Full coverage of U.S. budget and debt TAKEALOOK-Investors position for US downgrade Insider TV http:link.reuters.com/zat72s Yen and BOJ intervention link.reuters.com/tyf82s FX column on dollar/yen ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ EURO ZONE CONCERNS The euro came off a three-week high on concerns a new Greek bailout plan agreed last week may not be sufficient to prevent contagion from the debt crisis to other larger euro zone economies, though it remained only a cent below the early July high around $1.4577. The euro was down 0.4 percent on the day at $1.4457 , having earlier climbed to $1.4537. Traders cited offers in the $1.4550 to $1.4580 area and bids layered into $1.4450. The euro's falls followed comments by German Finance Minister Wolfgang Schaeuble that Berlin was against giving the euro zone's rescue fund carte blanche to purchase bonds in the secondary market. The remarks pushed Spanish and Italian bond yields higher. The drop in the euro helped push the dollar index off its lows. It was last up 0.3 percent at 73.697, off an earlier three-month trough at 73.421, though traders said it was likely to keep falling towards its post-Lehman low of 72.696 hit in May. (Graphic by Scott Barber, additional reporting by Neal Armstrong; Editing by Susan Fenton)

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