* Euro firms as ECB holds rates
* ECB offers no hints of future rate cuts
* BOJ easing expectations keep pressure on yen
NEW YORK, Jan 10 (Reuters) - The euro rallied to a one-week high against the dollar on Thursday as investors saw no hints of the European Central Bank laying the groundwork for cuts to its benchmark interest rate.
Earlier, the central bank left the key interest rate unchanged at 0.75 percent. The euro immediately gained as some in the market had positioned for the small chance the ECB would cut rates.
Market participants had been wary ECB President Mario Draghi would signal rate cuts in the coming months at a news conference. When that did not happen, the euro's gains accelerated.
"By the end of the Q&A session, investors realized that (Draghi's) satisfaction with improvements in financial market conditions means the ECB is less inclined to increase stimulus," said Kathy Lien, managing director at BKX Asset Management in New York. "A rate cut was not discussed at all and that in of itself was enough to drive the euro/dollar sharply higher."
The euro was last up 1.2 percent at $1.3215 with the session peak at $1.3222. Some $5.49 billion in euros changed hands using Reuters Dealing data through the global session.
Draghi said euro zone economic weakness was expected to extend into 2013, but the region should gradually recover later in the year and risks to its outlook were on the downside. .
"Mr. Draghi's normal tone of realism was replaced with a certain aura of optimism and giddiness," said Neal Gilbert, market strategist at GFT Forex, in Grand Rapids, Michigan. "He smiled more, defended a potential recovery more, and overall appeared to feel proud of the work he had done."
The euro was also bolstered by solid demand at a sale of mostly two-year Spanish debt, which caused Spain's benchmark 10-year bond yields to fall to a 10-month low.
"The Spanish bond auction was better than expected and that saw the euro rise," said Alexandre Dolci, FX strategist at BBVA in London.
Against the yen, the euro rose to an 18-month high. It last traded up 1.5 percent at 116.50 yen.
The euro also rose to a near one-month high against the Swiss franc.
"We look for a retest on the $1.33 high seen in mid-December and again at the start of the year," said Marc Chandler, global head of currency strategy at Brown Brothers Harriman in New York.
Elsewhere, sterling rose against the dollar after the Bank of England left interest rates and its quantitative easing target unchanged. It was last 0.4 percent higher at $1.6091.
The dollar neared a 2-1/2-year high against the yen on Thursday, with the Japanese currency looking susceptible to further losses on increasing bets of easier policy by the Bank of Japan.
The dollar was up 0.3 percent on the day at 88.15 yen , still close to the 88.40 yen hit on Friday, using Reuters data, its highest since July 2010. The yen gave up most of its gains earlier this week.
Some $2.44 billion in yen changed hands using Reuters Dealing data through the global session on Thursday.
Data showing strong export growth in China also knocked the low-yielding yen as investors sought higher-yielding and growth-linked currencies like the Australian dollar, which rose to a four-month high versus the U.S. dollar and a 4-1/2 year high against the yen.
"We can definitely see the trend of yen weakness continue," said Peter Kinsella, currency strategist at Commerzbank in London.
"Data for China last night was very good and that was good for risk in general and bad for safe-haven currencies, like the yen, which weakened on the back of that. The BOJ increasing its inflation target poses a further risk to the yen."
Data showed China's export growth rebounded sharply to a seven-month high in December, a strong finish to the year after seven straight quarters of slowdown, even as demand from Europe and the United States remained subdued. (ID:nL5N0RM09N)
Yen moves are expected to remain volatile ahead of the BOJ's Jan. 21-22 policy meeting.