FOREX-US dollar slides as financial sector worries persist

* Fannie, Freddie, Lehman concerns weigh on dollar

* Dollar index on track for worst loss in two months

* Yen rises broadly, up more than 1 pct vs Aussie dollar (Updates prices, adds quotes, adds byline)

By Gertrude Chavez-Dreyfuss

NEW YORK, Aug 21 (Reuters) - The dollar fell across the board on Thursday, pressured by persistent worries over the U.S. financial sector that also sparked a broad flight from risky trades, pushing the Japanese yen sharply higher.

The U.S. dollar index .DXY, a gauge of its value against a basket of six major currencies, was on track to post its worst one-day fall in two months.

A rise of more than 2 percent in oil prices CLc1 further stoked the negative sentiment toward the dollar, which was already bubbling on concerns over the viability of U.S. mortgage agencies Fannie Mae (FNM.N: Quote, Profile, Research, Stock Buzz) and Freddie Mac (FRE.N: Quote, Profile, Research, Stock Buzz), and investment bank Lehman Brothers (LEH.N: Quote, Profile, Research, Stock Buzz).

"The dollar is making a broad-based correction due to concerns over the financial sector, notably the Fannie and Freddie stories. Lehman also got the market's attention," said Vassili Serebriakov, a currency strategist at Wells Fargo in New York.

The Financial Times said on Thursday that Lehman, which some analysts said could soon announce write-downs of up to $4 billion, held talks to sell 50 percent of its shares to China's CITIC Securities and state-owned Korea Development Bank but both firms walked away, saying the price was too high.

A Lehman spokeswoman declined to comment on the report.

Renewed worries about one of Wall Street's most venerable banks and broad increase in risk aversion pushed the dollar further down from its 2008 highs struck earlier this week but boosted the yen.

The yen usually gets a boost when investors sell riskier and higher-yielding assets purchased with the Japanese currency's low interest rates.

Still, Wells Fargo's Serebriakov remained optimistic about the dollar's prospects. "Given the scope of the dollar's moves over the past two weeks, this correction is not too surprising and is actually quite modest. I don't think this puts into question the dollar's recovery."

In early New York trading, the dollar was down 1.4 percent against the yen at 108.27 yen <JPY=>, on track for its sharpest daily loss since March.

The decline against the yen was the main driver of a 0.7 percent fall in the dollar index on the ICE Futures Exchange to 76.363 .DXY.  Continued...