* Falls vs dlr as euro manufacturing slides * Figures contrast with strong US factory data * U.S. jobs, ECB, votes in France and Greece in focus By Jessica Mortimer LONDON, May 2 (Reuters) - The euro fell on Wednesday after weak data raised concerns about a deep and prolonged slowdown in the euro zone, looking vulnerable ahead of elections in France and Greece that could dent austerity plans drawn up to beat the debt crisis. The manufacturing data contrasted with better U.S. factory numbers a day earlier and weighed heavily on the euro. The fact that Wednesday's readings were weak not just in indebted peripheral states but in core nations too raised speculation over possible policy signals at Thursday's European Central Bank meeting. Italy's manufacturing sector shrank far more than expected, with new orders tumbling at their fastest rate in three years, while data out of Germany, Spain and France also showed factory activity falling significantly. The euro fell 0.8 percent to hit $1.3130, its lowest in more than a week, though volumes were thin after the May Day holiday in Europe and traders said this could cause exaggerated moves. The single currency dropped well below a one-month peak of $1.3284 hit on Tuesday, but it stayed above chart support at the 100-day moving average around $1.3116 and was last trading at $1.3146. "The PMI numbers were pretty dreadful ... There is clear pressure on euro/dollar now and it is looking likely to fall towards $1.31, the lower end of the recent range" said Jennifer Hau, currency strategist at Lloyds. "There is no expected policy change from the ECB but the market will be looking at what (bank governor Mario) Draghi says about the weaker numbers and about possible further steps it may take". The ECB meets on Thursday in Spain, with pressure back on the bank to use bond buying and other measures to shield weaker euro members from additional pain. While it is widely forecast to keep interest rates unchanged, expectations it may soon cut borrowing costs are rising, eroding the euro's interest rate advantage. The euro was also hurt by data that showed the euro zone labour market continued to worsen as unemployment rose to match its record high of 10.9 percent last seen 15 years ago. The focus later on Wednesday will shift to U.S. private payrolls figures due at 1215 GMT, an indicator of the health of the jobs market before non-farm payrolls numbers are released on Friday.. On Tuesday, data from the Institute for Supply Management showed U.S. manufacturing grew in April at the strongest rate in 10 months. RISKS AHEAD With elections looming in Europe, political uncertainty has the potential to push the euro below $1.30 in coming weeks. It hit a two-week low against the safe-haven yen, dropping to 105.43 yen, and a 22-month low against the British pound . Francois Hollande, front-runner and first-round winner in the French presidential race, has promised to shift the debate in Europe towards promoting growth if he is elected, raising concern about tensions between Germany and France. But others have played down such fears, saying Germany appears to be relaxing its focus on austerity. Morgan Stanley strategists said the soft PMI numbers will fuel the political debate about modifying austerity measures that are threatening to deepen a euro zone slowdown. "Such uncertainty will likely prompt euro to trade with a higher risk premium, in our view," the bank said. It has recommended investors to sell the euro against the dollar with a target of $1.3000. The election in Greece is more unpredictable. The two main parties supporting the country's bailout scheme are thought to have only a wafer-thin lead to form a coalition over smaller parties opposed to the programme. Tuesday's better U.S. data also helped the dollar rise 0.25 percent against the yen to 80.28, taking it off a 2-1/2 month low of 79.640 yen hit on Tuesday. Pressure on the yen increased after a Moody's ratings agency official said Japan's delay in implementing a sales tax increase could bring forward "the day of reckoning" in the Japanese government bond market. (additional reporting by Anirban Nag; Editing by Toby Chopra, John Stonestreet)

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