* Dollar pressured by debt ceiling deadline
* Without progress on debt talks, dollar likely weaker
* Weaker-than-expected U.S. jobs data to continue to weigh (Recasts, adds details and quotes, updates prices)
NEW YORK, July 8 (Reuters) - The dollar is likely to trend lower in the week ahead in the aftermath of an abysmal U.S. jobs report on Friday and without clear signs of progress on the approaching U.S. debt ceiling deadline.
The U.S. dollar fell against the yen, Swiss franc and sterling on Friday as significantly weaker-than-expected U.S. jobs data raised expectations that the Federal Reserve will leave interest rates low well into next year.
The U.S. Treasury runs out of cash to pay its bills on Aug. 2 unless the government is legally allowed to borrow more. With the United States long regarded as the most stable country with its currency used as the global reserve, even talk of a U.S. debt default has sent shudders through international markets.
The rapidly approaching deadline has for now overshadowed debt problems in the euro zone.
Friday's jobs report showing only meager growth in June payrolls added to the gloom surrounding the U.S. dollar as investors see the government and Federal Reserve as failing in efforts to stoke economic growth despite a huge stimulus program and rise in borrowings.
"U.S. policy (on debt) has been extend and pretend," said Douglas Borthwick, managing director of Faros Trading in Stamford, Connecticut. "We've come to an end of that."
The euro is down 1.9 percent
One-month euro/dollar risk reversals last traded at -2.55 on Friday
But investors are less bearish than a few weeks ago when the same risk reversal traded at -3.4, its lowest since June 2010.
Trying to break a budget deadlock and allow for an increase in the $14.3 trillion debt ceiling, Obama and congressional leaders are aiming for more than $2 trillion in budget savings and possibly as much as $4 trillion.
With Republicans and Democrats still far apart, U.S. President Barack Obama has scheduled another round of talks for Sunday.
"It's not like there's some imminent deal about to happen," said House of Representatives Speaker John Boehner at a news conference. "There are serious differences about how to deal with this very serious problem." [ID:nWEN5166].
While no deal is expected, investors will be seeking any clue that there is at least compromise.
"Any headline indicating they are closer to an agreement will be dollar positive," said Jessica Hoversen, foreign exchange and fixed income analyst at MF Global in New York.
BAD JOBS DATA
U.S. employment growth ground to a near halt in June, data from the U.S. Labor Department on Friday showed, with employers hiring the fewest workers in nine months, dampening hopes the economy was on the cusp of regaining momentum after stumbling in recent months. [ID:nN1E7670C0]
The euro
It last traded at $1.4255, down 0.7 percent on the day.
"It's a terrible number, there is no good news you can glean from it," said David Semmens, U.S. economist at Standard Chartered in New York. "I don't think this puts pressure on the Fed to do more, though." (Reporting by Nick Olivari; Additional reporting by Hulie Haviv, Wanfeng Zhou and Steven C. Johnson in New York; Editing by Leslie Adler)