The dollar tumbled to a record low against the euro on Thursday and hit parity with Canada's currency for the first time since 1976 as investors braced for further Federal Reserve interest rate cuts after this week's sharp reduction. The sell-off s

The Canadian dollar briefly reached parity with the U.S. dollar for the first time in 31 years, supported by lofty commodity prices, a strong domestic economy and concerns
about a U.S. economic slowdown. The dollar fell 1.4 percent against the Canadian dollar and last traded around C$1.0009. "People are convinced the Fed will have to cut by more than 50 basis points," said Matthew Strauss, senior foreign exchange strategist at RBC Capital Markets in Toronto. The dollar's sell-off "is a continuation of selling seen after the Fed's rate cut, and with the dollar index closing in on all-time
lows, people are looking for reasons to target that level."

Fed Chairman Ben Bernanke warned Congress on Thursday that raising the ceiling on the size of loans that government-sponsored mortgage finance companies Fannie Mae and Freddie Mac can buy could undermine market discipline. He also said that soft home prices and mortgage rate resets mean that sub prime adjustable-rate home loan delinquencies will rise further. "It's pretty clear (Bernanke) expects more weakness in the housing sector, but the fact that he says the market is self-correcting leads me to believe he expects the system to work itself out without too much help from the Fed," said Dustin Reid, senior currency strategist at ABN AMRO in Chicago.