TOKYO, Sep 21 The dollar hung near a record low against the euro and a 15-year trough ver

TOKYO, Sep 21 (Reuters) The dollar hung near a record low against the euro and a 15-year trough versus a basket of currencies on Friday as investors dumped the U.S. currency after an aggressive rate cut by the Federal Reserve earlier this week.

Support for the dollar has crumbled, pushing it beyond the psychological $1.40 level against the euro on Thursday and dragging the U.S. currency to parity against the Canadian dollar for the first time in 31 years.

A 50 basis point cut in the fed funds rate on Tuesday has battered the dollar as it tarnishes the appeal of assets denominated in the currency. Traders see this trend continuing given expectations that the Fed may cut rates again this year.

''The euro has gone through the $1.40 level, so dollar selling momentum is continuing,'' said a trader at a Japanese bank.

''We could be entering a phase of full-fledged dollar weakness.'' Comments from Fed Chairman Ben Bernanke on Thursday that global financial losses stemming from disarray in the U.S.

subprime mortgage market has ''far exceeded even the most pessimistic estimates'' did few favours for the dollar as they suggest more credit woes may be on the horizon.

The U.S. currency was also stung by climbing commodity prices, as oil prices hit a lifetime high in the previous session.

The euro hovered around $1.4065 little changed from late levels in New York on Thursday, when it surged to $1.4099, its highest level since the single European currency was unveiled in 1999.

Against a basket of currencies, the U.S. currency was at 78.646, near a 15-year low of 78.450 hit on Thursday and approaching a lifetime low of 78.190.

The dollar struggled against high-yielding currencies like the Australian and New Zealand dollars, sliding 0.5 percent and 0.6 percent, respectively.

But the dollar rose as much as roughly 0.25 percent against the yen to around 115.00 yen as Tokyo investors sold the yen across the board before the first half of the financial year closes at the end of the month.

The euro climbed as much as around 0.3 percent to 161.80 yen while the Australian and New Zealand currencies jumped as much as roughly a percent each.

Traders said that yen losses were hardly a sign that demand was picking up for risky positions that involve selling the Japanese currency for assets in higher-yielding ones, as investors are bracing for more economic weakness to emerge from the credit crunch.

REUTERS AK BST0600