* ECB raises interest rates by 0.25 pct
* Euro off 14-mth high vs dlr, 11-mth peak vs yen
(Recasts, updates prices, adds quotes, changes dateline, previous LONDON)
NEW YORK, April 7 (Reuters) - The euro fell against the dollar on Thursday after European Central Bank President Jean-Claude Trichet said the central bank did not decide if the interest rate hike earlier in the day was the first in a series..
Though he later qualified his remarks by saying the bank always does what they judge as necessary, it was not hawkish enough for some investors who had been betting on at least two further rate increases this year..
Trichet was speaking at a press conference after the ECB earlier raised rates for the first time since July 2008 by 25 basis points to 1.25 percent as expected.
The euro pared and extended losses in volatile trade as Trichet began speaking, particularly as he said euro zone monetary policy was still very accommodative though there were upside inflation risks from energy prices.
"His tone is decidedly neutral right now. He's keeping things very close to his vest," said Boris Schlossberg, head of research at GFT Forex. "I think the ECB has done what they wanted with this rate hike and they don't want to raise expectations for more right now."
The euro was down 0.5 percent on the day at $1.4255, off a more than 14-month high of $1.4350 touched on Wednesday. Options traders noted demand for short-term upside strikes in the $1.4400 region, as market players looked to protect against a further rise in the euro.
Some say the euro could fall to as low as $1.4200. "The euro trade has been so focused on interest rate differentials, so some of the fast money might come out of the trade," said Schlossberg.
The single currency has risen more than 3 percent since Trichet's comments on March 3 strongly hinted at a rate hike.
Against the yen, the euro fell one percent on the day, hitting the day's low around 121.10 yen, with traders citing real money selling of euros. It was last down at 121.27.
SPANISH AUCTION
The currency market was also cautious as Portugal moved to seek a bailout from the European Union, with the size of the package expected to be up to 80 billion euro ($114 billion).
Fears Spain may be the next on the market's radar for its debt problems eased somewhat after Madrid comfortably sold 4.1 billion euros of a new three-year bond.
Expectations for higher euro zone rates contrasted with uncertainty in the United States over when the Federal Reserve may begin to tighten policy.
Cleveland Federal Reserve Bank President Sandra Pianalto, speaking in Rome, said on Thursday, the U.S. Federal Reserve should keep its fed funds target rate very low for a long time and complete its asset purchasing program as scheduled.
This followed remarks the previous day from Atlanta Fed President Dennis Lockhart, who, citing, the fragility of the U.S. economy remains said it was too early for the Fed to to begin raising rates.
The Bank of England kept rates unchanged, as expected.
Sterling slipped against the dollar after the decision as some had positioned themselves for the slim chance of a rate rise. Sterling fell 0.4 percent to $1.6285.
The Bank of Japan kept monetary policy steady as expected and signaled its readiness to ease policy further, bucking a global trend of central banks withdrawing excess liquidity put in place during the financial crisis.
The dollar rose to a six-month high of 85.54 yen in Asia, almost 10 yen above its record low of 76.25 yen hit in March, days after Japan's devastating earthquake. It fell back to last trade around 85.12 yen, down 0.4 percent.
The Australian dollar scaled a fresh post-float high against the greenback of $1.0505. The Australian dollar was floated in December 1983. It was aided by data showing the Australian economy added a higher-than-expected 37,800 jobs in March.
(Additional reporting by Steven C Johnson in New York) (Reporting by Nick Olivari; Editing by Theodore d'Afflisio)