LONDON, Sep 24 The dollar fell to a record low against the euro for a third straight sess

LONDON, Sep 24 (Reuters) The dollar fell to a record low against the euro for a third straight session on Monday, weighed down by expectations of further U.S. interest rate cuts which are limiting the currency's appeal to global investors.

Investors ignored more complaints from French officials about the euro's strength versus the dollar, which again dropped to a 15-year low against a basket of major currencies.

The Federal Reserve's 50-basis point cut in overnight rates last week to 4.75 percent stoked expectations of even more monetary easing that would erode the dollar's rate appeal compared with the euro and higher-yielding currencies.

''The recent bout of dollar weakness continues, dollar bears are still holding the upper hand,'' said Kamal Sharma, currency strategist at Bank of America.

Futures prices implied on Monday that the chances of an easing by the U.S. Federal Reserve in October were at 66 percent from 72 percent on Friday's close but still well above the 26 percent priced in a week ago, according to Reuters data.

At least one more quarter percentage point cut has been factored in by the year-end on top of any move in October.

The euro rose to a record high at $1.4130, according to Reuters data, and by 1146 GMT, it traded at $1.4100, up 0.1 percent on the day. The dollar index slipped to a 15-year low of 78.398 and was down 0.1 percent from late U.S. trade on Friday at 78.461.

Market players are keeping a close eye on whether the dollar breaks the all-time low of 78.19 struck on its trade-weighted index in 1992, a level that analysts said would provide a key test of whether the U.S. currency's sell-off deepens or pauses.

Activity was subdued with financial markets in Tokyo, Asia's top currency trading centre, closed for a national holiday.

Markets in South Korea and Taiwan were also shut for holidays.

Analysts said the market will remain very sensitive to any news suggesting further escalation of the credit and liquidity crisis.

BANK LOSSES On Monday, European shares dipped after it emerged that Deutsche Bank was likely to face significant losses as a result of the credit crunch. But they recovered losses to trade slightly up on the day.

Sources familiar with the situation told Reuters the bank's profit could be hit by up to 1.7 billion euros ($2.4 billion) when it revalues loans that dwindled in value in the wake of a credit crunch.

Meanwhile, the euro's climb to an all-time high above $1.41 has stirred worries about its potential hit to European exports and prompted more criticism of the European Central Bank by the government of French President Nicolas Sarkozy.

A close aide to Sarkozy, Henri Guaino, said the euro's strength against the dollar and yuan was eroding the competitiveness and productivity of firms and the French government could not ''stay silent in the face of this absurdity''.

But ECB President Jean-Claude Trichet brushed aside the criticism by calling it an outdated debate, saying the central bank's first mandate was to ensure price stability.

The yen gained against the dollar and euro, indicating that continued turmoil in the banking sector is leading to greater risk aversion, analysts said. The euro dipped 0.3 percent to 162.21 yen while the dollar was down 0.4 percent at 114.99.

In a relatively quiet day for data, investors will take cues from speeches from European and U.S. policymakers.

Speakers include Federal Reserve Bank of Dallas President Fisher at 1300 GMT and Treasury Assistant Secretary Ryan Speaks at 1310. Swiss National Bank Vice Chairman Philipp Hildebrand will speak at 1600.

In the U.S., investors this week will get further insight into the housing decline that has sparked a global credit crisis, with the release of existing and new home sales for August.

''The US existing home sales (on Tuesday) and new home sales (on Thursday), ... are likely to re-fuel fears of a hard landing in the U.S., leaving the market intensifying speculation about more aggressive U.S. monetary easing,'' said Dresdner Kleinwort in a note to clients.

REUTERS SR DB1858