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FOREX-Euro falls to session lows on ECB's Draghi remarks

NEW YORK, March 13 (Reuters) - The euro slumped to session lows against the dollar and yen Thursday afternoon after comments from the European Central Bank chief signaled he remained open to more action to avert the crippling effects of deflation.

More ECB stimulus aimed to help the euro zone economy is seen eroding the purchase power of the common currency.

"Any material risk of inflation expectations becoming unanchored will be countered with additional monetary policy measures," ECB President Mario Draghi said in a speech at an award ceremony in Vienna.

He added the euro's exchange rate is becoming more important among policymakers to gauge the region's price stability.

The euro's earlier gains faded as traders dumped it, the dollar and commodity-linked currencies in favor of the yen and Swiss franc on escalating tension between the West and Russia over the political future of Ukraine's Crimea peninsula.

The common currency fell 0.4 percent at $1.3850, erasing earlier gains that propelled it to a 2-1/2-year peak of $1.3967.

Against the yen, the euro sank 1.3 percent to one-week lows, last traded at 140.96 yen.