* ECB unexpectedly cuts interest rates to 0.25 percent
* U.S. economy accelerates in 3rd quarter, payrolls report up next on Friday
* Dollar rallies to multi-week highs against euro, yen
NEW YORK, Nov 7 (Reuters) - The euro fell to a more than seven-week low against the dollar on Thursday after the European Central Bank shocked investors by cutting interest rates and said that policy will remain accommodative for as long as necessary.
Adding to dollar strength was data showing the U.S. economy accelerated in the third quarter while jobless claims fell in the latest week, supporting the case for a cutback in stimulus by the Federal Reserve later this year.
The ECB on Thursday cut borrowing costs to a record low of 0.25 percent in response to a sharp drop in inflation. Although some in the market had expected a rate cut as early as this week, traders said most were betting the ECB would wait until December.
At its post-meeting press conference, ECB head Mario Draghi said he sees further diminishing inflation pressures and that the central bank expects rates to remain at present or lower levels for an extended period of time.
"With the Fed's easy money days seen increasingly numbered, the ECB's more dovish and divergent outlook augurs meaningful euro depreciation over the coming weeks," said Joe Manimbo, senior market analyst at Western Union Business Solutions in Washington.
The euro tumbled 1.2 percent to $1.3346, having fallen as low as $1.3295, according to Reuters data, matching the low set on Sept. 16.
It also dropped to a 10-month low against sterling and a one-month trough against the yen.
"The market had not priced in a cut. So the euro will head lower and we can see it move towards the $1.32 area," said Alvin Tan, currency strategist at Societe Generale.
The euro dropped below strong chart support at $1.3462 from a trendline drawn from lows hit in early July, with the break below there accelerating its losses.
The dollar index, which measures the greenback versus a basket of currencies, rose to its highest since mid-September of 81.460. It was last up 0.9 percent at 81.208.
The U.S. economy expanded at a 2.8 percent annual rate in the third quarter, the quickest pace since the third quarter of 2012, the Commerce Department said on Thursday. Economists had expected 2.0 percent growth.
Analysts said euro/dollar could fall further if Friday's U.S. jobs report for October is on the strong side and suggests the economy has weathered the partial government shutdown in the first half of that month.
This would be seen as making it more likely the Federal Reserve will scale back monetary stimulus soon, in contrast to the ECB's accommodative stance.
The dollar rose 0.6 percent to 99.19 yen, having climbed as high as 99.41 yen, a near seven-week high.