* ECB's Draghi says rates will remain low
* But traders focus on comment on no further rate cuts
* ECB cuts rates, announces corporate bond buys
* Measures top what market had priced in for meeting
(Adds forex strategist's quote, updates market action)
By Gertrude Chavez-Dreyfuss
NEW YORK, March 10 (Reuters) - The euro jumped to a
three-week high against the dollar on Thursday, rallying from a
six-week low after European Central Bank (ECB) President Mario
Draghi said he did not anticipate more interest rate cuts to
revive a sluggish euro zone economy.
Europe's shared currency earlier fell 1.6 percent against
the greenback as the ECB unleashed a raft of measures, many of
which the market had not expected, to stimulate euro zone growth
and inflation.
The ECB sliced its marginal and refinancing rates and made a
widely expected 10-basis-point cut in deposit rates. It also
expanded its bond-buying program to include corporate debt.
While Draghi said he did not expect further easing, he did
say interest rates would remain low for a long time.
"We're seeing this rush to cover shorts because of that one
statement from Draghi that he does not anticipate further rate
cuts," said Omer Esiner, chief market analyst at Commonwealth
Foreign Exchange in Washington.
"But when the dust settles, I think the euro is still going
to go lower, based on the fact that the ECB exceeded market
expectations with its suite of policy tools, and also market
positioning heading into today's meeting was far less bearish
for the euro than we saw in previous meetings."
The euro EUR= recovered from six-week lows against the
dollar of $1.0823 to trade at a three-week high of $1.1217 as
money market rates in the euro zone rose on reduced expectations
for further deposit rate cuts. The euro was last at $1.1120, up
1.1 percent.
The euro's near 4-cent trading range was the biggest since
the 4.4-cent range on Dec. 3 when the ECB cut its deposit rate
by a less-than-expected 10 basis points.
Against the Japanese yen, the euro hit a three-week high and
was last at 126.59 EURJPY= , up 1.5 percent.
The single euro zone currency also posted gains against the
British pound EURGBP= and the Swiss franc EURCHF= .
Expectations were high that ECB policymakers were intent on
boosting inflation to help revive the euro zone economy.
"It should be supportive of risk sentiment, but it also
shows limits on central bank policies. The snapback in the euro
after its initial fall showed traders seized on what Draghi
said," said Ian Gordon, G10 FX strategist at Bank of America (NYSE:BAC)
Merrill Lynch in New York.