* Dollar falls to 15-year low against the yen
* Dollar index falls to 8-1/2 month low
* Euro up but struggles as Fitch downgrades Ireland (Adds reaction to U.S. data, updates prices)
NEW YORK, Oct 6 (Reuters) - The dollar fell to a fresh 15-year low against the yen and an 8-1/2 month low against a basket of currencies on Wednesday hurt by expectations the U.S. Federal Reserve will further ease monetary policy.
Dollar losses accelerated after a report showed U.S. private employers unexpectedly cut 39,000 jobs in September after an upwardly revised gain of 10,000 in August.. The ADP payrolls processor report comes ahead of Friday's government non-farm payrolls report.
A broadly weak dollar helped push the euro to an eight-month high, though the single currency pared gains after Fitch downgraded Ireland's credit rating, renewing concerns about the fiscal health of peripheral euro zone countries.
Comments by Chicago Fed President Charles Evans, who was quoted as saying the central bank should do much more to spur the economy, also kept negative dollar sentiment firmly intact. This has intensified speculation the Fed will resume quantitative easing, possibly in November.
"ADP hasn't recently had that great a correlation with the official non-farm payrolls number," said Eric Viloria, currency strategist at Forex.com in New York. "But it all adds to the case for the Fed coming in to create more stimulus."
In early morning trade in New York, the dollar dipped as low as 82.75 yen on electronic trading platform EBS before recovering to 83.00 yen, still down 0.2 percent on the day.
Wednesday's low was below the 82.87 level where the Bank of Japan moved to weaken the yen on September 15.
But investors were not willing to push the dollar too low against the yen despite the fresh 15-year low in case Japanese authorities step in again to curb yen strength.
The greenback was well below the high of 83.99 yen it hit on EBS after the Bank of Japan (BOJ) announced easing steps on Tuesday.
The dollar was little changed against a basket of currencies at 77.775, having fallen as far as 77.570, its lowest since January 20.
EURO GAINS
The euro gained 0.1 percent at $1.3841 in a volatile session that saw it swing between losses and an eight-month high of $1.3882 on the EBS trading platform.
The single currency was helped earlier by data showing a surge in German manufacturing orders in August, leaving a potential for the single currency to test $1.40.
Technically, the euro's next target is $1.3895, a 61.8 percent retracement of its fall from above $1.51 late last year to its June low of $1.1876. The 200-week moving average stands at around $1.3920.
The dollar also touched a 2-1/2 year low against the Swiss franc at 0.9620 francs on EBS trading platform. This brings it closer to the all-time low of 0.9572 hit on EBS, while it is already below the all-time low recorded on Reuters data of 0.9674.
The dollar's steady drop prompted talk of an escalating global currency war, ahead of the IMF-G7 meetings this weekend, with emerging countries growing increasingly edgy about the flood of capital inflows from advanced economies.
"Given all the talk of more QE by the Fed, the trend for the dollar index is lower and it can fall another 3-4 percent from these levels," said Neil Mellor, currency strategist at Bank of New York Mellon in Londonthe market, both commodities were expected to be major beneficiaries, helping commodity currencies.
This helped commodity-linked currencies, with the higher-yielding Australian dollar hitting its highest in more than two years at $0.9781, leaving it on course for a test of the 2008 high of $0.9851.
(Additional reporting by Steven C Johnson and Vivianne Rodrigues in New York and Jessica Mortimer in London) (Reporting by Nick Olivari; Editing by Theodore d'Afflisio)