* All eyes on ECB press conference after central bank decision
* Euro recovers above $1.24
* Dollar flat after hitting two-week low
* Graphic: World FX rates in 2018 http://tmsnrt.rs/2egbfVh
LONDON, March 8 (Reuters) - The euro erased its losses and rose slightly on Thursday after the European Central Bank dropped a long-standing pledge to increase bond buys if needed.
Investors bought back into the euro, seeing the removal of the pledge as another small step in weaning the euro zone economy off protracted stimulus.
The single currency, which was down 0.3 percent at $1.2378 before the announcement, increased to a day's high of $1.2431 before settling at $1.2411.
All eyes will be on the ECB press conference later for clues about the speed and timing of monetary tightening and any signs of president Mario Draghi starting to grow uncomfortable with the currency's strength. The euro trade-weighted index this week hit its highest since September 2014.
After rising sharply at the start of the year to hit a three-year high of $1.2556 in February, the euro has been stuck in a range in recent weeks as the dollar alternately rose and sold off depending on global risk appetite.
The ECB keep monetary policy unchanged on Thursday, as was expected.
"Everything else is unchanged in the statement. We expect Draghi to take a dovish stance in the policy to offset any lingering nervousness in the markets that the Governing Council is changing its forward guidance," Antje Praefcke, currency strategist at Commerzbank in Frankfurt.
"The dropping of the easing bias is consistent with recent political and economic developments."
Manuel Oliveri, FX Strategist at Credit Agricole, recommended "buying the euro on dips" and said the single currency had further to rise.
DOLLAR RECOVERY FADES
The dollar fell back to trade flat against a basket of major currencies at 89.610 after pulling away from a two-week trough of 89.407 reached the previous day.
The greenback had weakened sharply following the resignation on Tuesday of Gary Cohn, the top economic adviser to the White House who was seen as seen as a bulwark against protectionism in President Donald Trump's administration.
The dollar was underpinned by Wednesday's data on U.S. private hiring and labour costs that reinforced the view of underlying strength in the economy.
Some dealers have traded on the possibility that Trump's tariff threat was a negotiating ploy in trade talks with U.S. neighbours.
The Japanese yen traded flat at 106.13 yen after earlier gaining to below 106 as the dollar sold off.
The Hong Kong dollar fell to a 33-year low, at 7.85 per U.S. dollar. The Hong Kong Monetary Authority said on Thursday it had no immediate plans to issue bills to prop up the local currency.
(Additional reporting by Saikat Chatterjee Editing by John Stonestreet and Andrew Heavens)