FOREX-Dollar slips after U.S. jobs data signals later Fed rate hike

* U.S. June nonfarm payrolls rise by 223,000

* Bets on first Fed rate hike shift to January

* Dollar index slips from 3-1/2-week high (Updates prices, adds comments)

By Sam Forgione

NEW YORK, July 2 (Reuters) - The U.S. dollar slipped against a basket of major currencies on Thursday after disappointing U.S. jobs data pushed out bets for a Federal Reserve rate hike to 2016, while caution ahead of this weekend's Greek referendum limited losses.

Nonfarm payrolls increased by 223,000 last month, the Labor Department said. Adding to the report's soft note, April and May data was revised to show 60,000 fewer jobs were added than previously reported, while the labor force participation rate fell to its weakest since October 1977.

"The lower-than-expected jobs data has definitely cut down the expectations for two rate hikes before the end of the year," said Alfonso Esparza, senior currency Strategist at Oanda in Toronto.

After the data, futures contracts showed that traders saw January as the first Fed meeting at which a rate hike is more likely than not, based on CME FedWatch, which tracks expectations using its Fed funds futures contracts. Rate hikes are seen as boosting the dollar by driving investment flows into the United States.

While the dollar fell from a nearly one-week high against the yen, a five-week high against the Swiss franc, and a 3-1/2-week high against a basket of six major currencies, the losses were limited, and the greenback remained above Wednesday's session lows.

The euro remained on track for its second straight weekly percentage decline against the dollar, of about 0.7 percent.

Analysts said activity was muted because market participants were awaiting the outcome of Greece's July 5 referendum on a bailout deal and were refraining from making sizable bets ahead of the U.S. Independence Day holiday.

"If there is a Greece exit from the euro, there is no way to tell where the contagion will stop," said Lane Newman, director of foreign exchange for ING Capital Markets in New York.

Analysts said currency trading would be subdued on Friday, when U.S. markets will be closed.

The euro was last up 0.22 percent against the dollar at $1.10775 after hitting a session high of $1.11220 following the jobs data.

The dollar was down 0.05 percent against the yen at 123.110 yen after hitting a session low of 122.960 yen.

The dollar was 0.37 percent lower against the Swiss franc at 0.94450 franc after hitting a session low of 0.94200 franc.

The dollar index, which measures the greenback against a basket of six major currencies, was down 0.18 percent at 96.139 . (Reporting by Sam Forgione; Editing by Peter Galloway and Lisa Von Ahn)