FOREX-Euro falls as ECB's Draghi rings cautious note

    * ECB's Draghi raises caution on inflation, protectionism
    * Trump opens door on trade "flexibility" for "real friends"
    * Traders await BOJ policy meeting, U.S. payrolls data 

 (Updates market action, changes dateline, previous LONDON)
    By Richard Leong
    NEW YORK, March 8 (Reuters) - The euro fell on Thursday as
European Central Bank President Mario Draghi, while
acknowledging faster growth in Europe, said regional inflation
remained subdued and rising protectionism is a risk.
    Draghi expressed his view on these issues at his news
conference after a central bank policy meeting. It overshadowed
the ECB's dropping of a long-standing pledge to increase its
bond purchases if needed, a move that briefly spurred buying of
the single currency.
    "All of which sent the euro yo-yoing as the markets ponder
the very real threat of a trade war between the U.S. and the
EU," said David Lamb, head of dealing at FEXCO Corporate
Payments in Edinburgh.
    Draghi's comment on protectionism came as traders awaited
details on U.S. President Donald Trump's proposed tariffs on
imported steel and aluminum, which has whipped up anxiety about
a global trade war.
    Trump was expected to sign a proclamation later Thursday or
on Friday to impose a 25 percent levy on steel and a 10 percent
tariff on aluminum.
    Trump promised earlier on Thursday to show great flexibility
and cooperation toward the United States' "real friends" after a
White House official said late on Wednesday that Trump was
considering offering Canada and Mexico a 30-day exemption from
the tariffs.
    The dollar, which is seen a safe haven on trade war fears,
had dipped on prospects for a softening stance on the tariffs
before gaining on perceived dovish remarks from Draghi.
    The greenback had weakened following the resignation on
Tuesday of Gary Cohn, Trump's top economic adviser, who was seen
as a bulwark against protectionism in the White House.
    The index, which tracks the greenback versus a basket
of six currencies, rose 0.38 point or 0.42 percent, to 90.017.
    The euro was last down 0.63 percent at $1.2334.
    With the ECB in the rear-view mirror, traders await news
from the Bank of Japan's policy meeting and the U.S.
government's payrolls report for February.
    "We think that they will not make any changes. Inflation is
ticking higher but under their target," said John Doyle, vice
president of dealing and trading at Tempus Inc in Washington.
    On Tuesday, Bank of Japan Governor Haruhiko Kuroda said a
future exit of its ultra-loose monetary policy would need to be
"very gradual," tempering his remarks before lawmakers that the
central bank would consider an exit if his inflation target were
reached in fiscal 2019.
    The dollar was last up 0.03 percent, at 106.09 yen,
while the euro was down 0.58 percent at 130.87 yen.
========================================================
    Currency bid prices at 10:50AM (1550 GMT)
 Description      RIC         Last           U.S. Close  Pct Change     YTD Pct     High Bid    Low Bid
                                              Previous                   Change                 
                                              Session                                           
 Euro/Dollar      EUR=        $1.2333        $1.2412     -0.64%         +2.81%      +1.2446     +1.2332
 Dollar/Yen       JPY=        106.0700       106.0600    +0.01%         -5.86%      +106.2600   +105.9000
 Euro/Yen         EURJPY=     130.84         131.63      -0.60%         -3.21%      +131.9700   +130.8400
 Dollar/Swiss     CHF=        0.9473         0.9433      +0.42%         -2.77%      +0.9485     +0.9422
 Sterling/Dollar  GBP=        1.3828         1.3899      -0.51%         +2.34%      +1.3909     +1.3826
 Dollar/Canadian  CAD=        1.2937         1.2910      +0.21%         +2.86%      +1.2951     +1.2867
 Australian/Doll  AUD=        0.7781         0.7823      -0.54%         -0.26%      +0.7838     +0.7782
 ar                                                                                             
 Euro/Swiss       EURCHF=     1.1685         1.1706      -0.18%         -0.03%      +1.1740     +1.1686
 Euro/Sterling    EURGBP=     0.8917         0.8926      -0.10%         +0.38%      +0.8957     +0.8907
 NZ Dollar/Dolar  NZD=        0.7245         0.7283      -0.52%         +2.24%      +0.7296     +0.7246
 Dollar/Norway    NOK=        7.8478         7.8073      +0.52%         -4.38%      +7.8604     +7.7991
 Euro/Norway      EURNOK=     9.6791         9.6916      -0.13%         -1.72%      +9.7288     +9.6760
 Dollar/Sweden    SEK=        8.2660         8.2286      -0.15%         +0.78%      +8.2744     +8.2145
 Euro/Sweden      EURSEK=     10.1967        10.2116     -0.15%         +3.63%      +10.2345    +10.1957
 
    
    
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 (Additional reporting by Tommy Wilkes, Saikat Chatterjee;
editing by Andrew Heavens and Jonathan Oatis)
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