FOREX-Dollar slides on oil; Swiss franc hits record high

* Swiss franc rises to record high vs dollar

* MidEast tension fuels safe-haven demand, oil surges

* Euro rises versus dollar, ECB better placed for oil rise (Adds quote, detail, updates prices, changes byline, dateline; previous LONDON)

By Gertrude Chavez-Dreyfuss

NEW YORK, Feb 24 (Reuters) - The dollar fell broadly on Thursday, with further losses seen as likely, pressured by a surge in oil prices as investors feared civil unrest in Libya could spill over to other top producers including Saudi Arabia.

The safe-haven Swiss franc, on the other hand, hit a record high against the greenback, benefiting from the ongoing geopolitical turmoil in the Middle East. The franc has gained in eight of the last nine sessions versus the dollar.

In the last two weeks, the Swiss currency has gained 5.1 percent so far, its best showing since late June last year.

"The focus is on the Middle East and oil prices. Everybody and his mother has upgraded their forecasts on oil prices, with one even forecasting oil to hit $200 per barrel," said Ron Simpson, director currency research at Action Economics in Tampa, Florida. "That has weighed on the dollar."

Brent crude oil leapt to its highest since August 2008 on concern that the unrest, which has cut more than a quarter of OPEC-member Libya's output, could spread to other producers. [ID:nL3E7DO0SC]

High oil prices tend to be negative for the dollar as the United States is a heavy oil importer.

In early New York trading, the ICE Futures' dollar index <.DXY> fell to its lowest in three weeks at 77.011. It was last at 77.081.

"The nature of the crisis is dollar negative. It raises oil costs and the U.S. is a big importer of oil, it hits household wealth and productivity and growth more than anywhere else," said Peter Frank, currency strategist at Societe Generale.

He added that such concerns would overshadow the safe-haven status of the world's largest reserve currency so long as instability in the Middle East and North Africa remains an oil supply issue and does not morph into a bigger, global problem.

The dollar fell to a record low of 0.9240 Swiss franc on electronic trading platform EBS, its slide having intensified after triggering stop-loss selling below its previous record low of 0.9301 set at the end of last year.

The dollar last traded down 0.7 percent at 0.9260 franc.

Technical analysts said the U.S. currency's break below 0.9309 franc, around major trendline support drawn from lows hit in 1995 and 2008, had opened the way to more losses.

One-month implied dollar/Swiss volatility continued to pick up, trading around 11.20 percent on Thursday, although this was still well below levels of around 15 percent seen around the start of the euro zone debt crisis in April 2010.

The euro also fell against the Swiss franc, sliding to around 1.2706 francs , its lowest since Jan 13, before pulling back to 1.2739, down 0.7 percent on the day.

Turmoil in the Middle East also supported the yen. Investors tend to buy back the yen in times of uncertainty as they unwind risky assets financed by the Japanese currency's low rates.

The dollar was down 0.9 percent at 81.75 yen . Traders cited dollar selling by Japanese exporters and model funds, as well as some liquidation of long dollar positions established since the beginning of the year.

The euro was up 0.3 percent against the dollar at $1.3789, staying supported on recent hawkish comments on inflation by European Central Bank officials. That increased expectations the ECB may begin seriously considering an exit strategy from ultra-low rates.

Traders cited stops through $1.3700 and more through $1.3680, with sell orders at $1.3810/25 before stops through $1.3835.

(Additional reporting by Naomi Tajitsu; Editing by Chizu Nomiyama)