* European shares hit 1-week low
* Most sectors fall, euro zone banks at 2 1/2 year high
* Temenos spikes in heavy volumes
* Aryzta, Software drop after updates (Adds closing prices)
By Danilo Masoni and Julien Ponthus
MILAN/LONDON, Jan 25 (Reuters) - European shares fell on Thursday as remarks from European Central Bank chief Mario Draghi kept the euro running, sending the currency to fresh three-year highs against the dollar.
The euro zone STOXX index fell 0.4 percent after hitting a one-week low, after the single currency spiked higher following remarks from Draghi who said the ECB did not target foreign exchange rates. The broader pan-European STOXX 600 also hit a one-week low.
"The euro jumped past $1.25 for the first time in over three years after the ECB appeared to be more relaxed about the currency’s recent appreciation than many market participants expected," said ETX Capital analyst Neil Wilson.
Investors were eagerly awaiting Draghi's comments on the euro after ECB policy-makers kept interest rates and guidance unchanged, all the more since U.S. Treasury Secretary Steve Mnuchin on Wednesday talked of the benefits of a weak dollar.
A strong euro typically hurts European exporters whose products become less competitive against rivals producing in a weaker currency. Among national benchmarks, the export-oriented German index DAX fell the most, down 0.9 percent.
Most euro zone sectors ended in negative territory, while banks, which tend to benefit from expectations of a tighter monetary policy, rose 1.2 percent to their highest since August 2015.
"Broadly speaking this was not an overtly dovish (press conference) – he could have done more to talk the euro down. Suggesting that rates were highly unlikely to rise this year was moderately dovish but in context not particularly so – interest rate expectations were already firm set for a 2019 hike," added ETX's Wilson.
Among the biggest gainers were Spain's Bankinter and Caixabank and Italy's UniCredit and BPER Banca, all up more than 2 percent.
Elsewhere among outstanding movers, Swiss software company Temenos rose as much as 18 percent in heavy volumes, hitting a fresh record high. Reuters was investigating the move on the stock, which is subject to regular takeover speculation.
Top STOXX loser was speciality baker Aryzta, down 20.8 percent, after it sharply cut its 2018 core profit forecast, while Software AG fell 9 percent after it posted a decline in third-quarter core profits as its digital, database and consulting divisions all showed lacklustre growth.
Clariant fell 8.1 percent as activist investor White Tale sold out of the speciality chemicals group after failing to win an independent strategic review and board seats.
STMicroelectronics rose 0.7 percent after the chipmaker said auto and industrial demand would offset a seasonal smartphone dip in the first quarter.
Among small caps, Swedish biometric group Fingerprint Cards lost 18.3 percent after it warned on profits and said it would slash jobs.
Nordic bank Nordea gave a disappointing update with fourth quarter operating profit below market expectations and fell 4.2 percent.
British lender Close Brothers Group's shares rose 8 percent after it saw a rise in first-half profit, driven by strength in banking and asset management and higher trading income from market maker Winterflood. (Reporting by Danilo Masoni, Editing by Peter Graff)