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Dollar down on U.S. shutdown in European trade

LONDON, Oct 1 (Reuters) - The dollar fell to a 1-1/2 year low against the safe-haven Swiss franc and an 8-month low against the euro on Tuesday after the U.S. Congress failed to reach an agreement and led to a government shutdown.

Expectations that the shutdown, which in the past has lasted from one day to nearly a month, will hurt the economy and prompt the Federal Reserve to keep policy accomodative weighed on the dollar broadly.

The U.S. currency had already been trading near long-term lows before Monday night's stalemate, however, and some investors remained hopeful of a swift resolution to the standoff. By 0654 GMT, the dollar index was down 0.4 percent at 79.918, its lowest since Feb. 13.

The dollar fell to 0.9004 francs, its lowest since early April 2012.

The dollar's woes lifted the euro to its highest level since Feb 6, rising to $1.3580, up 0.4 percent on the day.