(Adds details, updates prices)
* Euro at 6-month lows versus dollar and yen
* ECB shift away from tightening bias cuts support for common currency
* Euro technical outlook weakens, eyes support at $1.3770
* Dollar index hits 2-month high; G7 meets but expectations low
By Neal Armstrong
LONDON, Sept 9 (Reuters) - The euro fell to six-month lows versus the dollar and the yen on Friday, with more falls likely after the European Central Bank dropped its tightening bias and forecast lower growth in the debt-plagued euro zone.
The euro's fall helped drive the dollar index to two-month highs , while the greenback also hit three-and-a-half-month highs versus the Swiss franc and a one-month high against the yen .
The European Central Bank held rates steady at its policy meeting on Thursday, saying inflation risks are no longer skewed to the upside and that economic growth in the region will be slow at best, prompting money markets to fully price in a rate cut by the year-end.
"The ECB has now left the door open for an easing of policy and there are more downside risks to come for the euro with Greek PSI (private sector involvement in the bailout) to be finalised and ratification of the EFSF (rescue fund) still required," said Kiran Kowshik, currency strategist at BNP Paribas.
The euro fell to $1.3788 on trading platform EBS after breaking below its July low of $1.3838 to trade at its lowest levels since mid-March and was last down 0.6 percent for the day.
"Interest rate differentials have been the dominant influence on euro/dollar t
his year so the change in the ECB's stance suggests the euro should go lower," said Jane Foley, senior currency strategist at Rabobank.
Technical analysts said the break below the euro's 200-day moving average earlier in the week at $1.4024 was a bearish sign. A daily close underneath the July low of $1.3838 would add to the heavy outlook, with next support at $1.3770, the 38.2 percent retracement of the euro's 2010 to 2011 rally.
The common currency fell to a six-month low of 107.17 yen, slipping below Thursday's base of 107.56. Against the Swiss franc, it was steady around 1.2148 francs , still above the 1.20 floor set by the Swiss National Bank.
"The SNB measures mean safe-haven flows are being redirected elsewhere. It's a battle of the uglies with euro/dollar but when the euro zone crisis worsens the dollar will see additional safe-haven flows, at least in the near term," said Foley at Rabobank.
The dollar rose to a three-and-a-half month high versus the Swiss franc of 0.8815 francs as the SNB's measures kept investors wary.
G7 EXPECTATIONS LOW
Another potential pitfall for the euro is uncertainty over Greece's debt swap plan. Friday is the deadline Athens has given investors in Greek bonds to say whether they intend to take part in its debt exchange offer, a key part of a second 109 billion euro bailout package it clinched on July 21 to avoid bankruptcy.
Because of the time needed to process all responses, however, Athens has no plan to announce the result on Friday, while a low participation rate in Greece's debt swap could mean reluctant euro zone partners will have to cough up more cash for the overall package to work.
The market showed little reaction to U.S. President Barack Obama's $447 billion package on jobs, made up largely of tax cuts for workers and businesses, due to doubts over whether he can push it through a divided Congress.
Federal Reserve Chairman Ben Bernanke offered little new insight as to what the central bank will do at its policy meeting on Sept. 20-21 in his speech on Thursday, though most players remain convinced that the bank will start buying longer-dated bonds in a bid to try to lower longer bond yields.
The dollar index rose to 2-month highs of 76.684, helped largely by the euro's fall. Against the yen, the dollar edged up to a one-month high of 77.84 yen .
Finance ministers and central bankers from the G7 economic powers meet in Marseille on Friday with global slowdown and debt crises pressuring them to find new solutions, and currency intervention back on the table, but expectations for action are low.
Japanese Finance Minister Jun Azumi called for the G7's understanding on Japan's intentions to counter speculative moves in the yen, after Switzerland's aggressive move this week in setting a floor for euro/Swiss to try and protect its export driven economy.
Traders said they would watch for any comments about the stance of officials on intervention and global imbalances. Some said reassurance about the global economic outlook could spur demand for riskier assets, which may be positive for the euro.
(Additional reporting by Naomi Tajitsu)