TOKYO, Sep 10 (Reuters) The dollar slid to a 15-year low against a basket of currencies on Monday,

TOKYO, Sep 10 (Reuters) The dollar slid to a 15-year low against a basket of currencies on Monday, after data showed U.S.

employers cut jobs for the first time in four years, stoking expectations for a hefty Federal Reserve rate cut this month.

Friday's data showing companies cut 4,000 jobs last month, the first such decline since August 2003, prompted investors to see a bigger chance the Fed will cut rates by 50 basis points next week to protect the economy from the housing market crisis.

Investors further sold the dollar on Monday, after the unexpected drop in U.S. jobs.

''The trend in the dollar is clearly downward,'' said Tsutomu Soma, a senior manager of foreign securities at Okasan Securities.

The dollar's trade-weighted index against six major currencies fell to a low of 79.826, the lowest since September 1992, and last traded at 79.88.

The dollar fell 0.5 percent from late U.S. trade to 112.80 yen sliding back towards a 14-month low of 111.60 yen.

A nearly 3 percent fall in Japan's Nikkei share average, following a decline on Wall Street, forced investors to trim risky yen carry trades, pushing down the dollar and higher-yielding currencies against the yen.

But Japanese importers bought the U.S. currency aggressively, helping limit losses in the dollar, traders said.

In yen carry trades, investors use the low-yielding yen to finance purchases of assets with higher returns elsewhere. That kind of trade played a big part in the yen's fall to a trade-weighted and inflation-adjusted 22-year low in June.

Analysts believe the Fed may opt for an unusually big cut in rates from the current 5.25 percent to help restore confidence among banks that have become reluctant to lend to each other, leading to strains in money and credit markets.

''A September Fed rate cut is a done deal,'' said Hiroshi Yoshida, a forex trader at Shinkin Central Bank. ''The market now focuses whether it is by 25 basis points or 50 basis points.'' The Fed usually moves in 25 basis point increments, but the fears of the exposures and commitments of banks to U.S. subprime mortgages, asset-backed commercial paper and structured investment vehicles has caused money market trading to dry up.

While the interbank lending problems have affected the sterling and euro markets as well, investors are increasingly turning negative on the dollar as the U.S. economy shows the most evidence of taking a hit from the housing problems.

The euro edged up 0.1 percent to $1.3780 jumping back near a high of $1.3853 struck in July -- the highest since the single currency was first launched in 1999.

The European single currency was down 0.4 percent at 155.40 yen The high-yielding Australian and New Zealand dollars dropped around 1.5 percent each versus the yen.

Government data showed on Monday the Japanese economy shrunk 0.3 percent in April-June from the previous quarter, against an initial estimate of 0.1 percent growth.

But the market shrugged off the data as the shock from the weak U.S. non-farm payrolls report was much greater, traders said.

Okasan's Soma said Japanese retail investors would likely refrain from the dollar and other higher-yielding currencies for now, hoping for a deeper drop so they secure higher yields abroad at better levels.

''Japanese individual investors backed away, thinking they can wait for the dollar to fall further before they return to the market,'' Soma said.

REUTERS TB RN0744