Euro extends gains on ECB's Draghi comments ( 10_YEAR TIP BND AGG TLT TBT 30_YEAR DXY UUP UDN FXE FXY EURUSD ) (by Deborah Levine)

NEW YORK (MarketWatch) -- The euro extended gains against the dollar to $1.28 Thursday after European Central Bank President Mario Draghi ended his monthly press conference. Some analysts noted comments that the he felt the ECB's first long-term refinancing operation is helping to improve the funding situation of banks, and that the ECB is working on making changes to collateral rules for the next LTRO. "The euro-dollar rallied because Draghi made no mention of more easing," said Kathy Lien, director of currency research at GFT. "Its gains should still be limited because assuming that the central bank has shut the door on more stimulus because two small bond auctions went well, is premature." The euro (cur_eurusd) rose to $1.2814 from $1.2661 Wednesday. It hasn't closed above $1.28 since Jan. 4. The dollar index (dxy) , which measures the greenback against a basket of six currencies, fell to 80.820, down from 81.313 in late North American action on Wednesday.

ECB says its measures improved funding for banks (by Polya Lesova)

LONDON (MarketWatch) -- European Central Bank President Mario Draghi said on Thursday that the extensive recourse to the ECB's first three-year refinancing operation indicates that the central bank's non-standard policy measures are helping to improve the funding situation of banks. The measures undertaken by the central bank prevented a "major funding constraint" for the banking system, Draghi said, adding that some unsecured bank-bond markets have reopened. The ECB chief also said there are signs that the money the central bank has lent to the banks is flowing through the economy.

ECB: Substantial downside risks to outlook (by Polya Lesova)

LONDON (MarketWatch) -- European Central Bank President Mario Draghi said on Thursday that the euro-zone economic outlook remains subject to high uncertainty and substantial downside risks, such as further intensification of tensions in the debt markets. Recent survey data pointed to "tentative signs of stabilization in activity at low levels," Draghi said, but added that it was hard to make a confident judgment based on those preliminary data. The decision to keep interest rates on hold Thursday was unanimous, the ECB chief said, adding that the bank's monetary stance remains accommodative: "Uncertainty is very high and we will monitor all developments and we will stand ready to act."