Jan 28 (Reuters) - Short-end euro zone bond yields fell

on Wednesday after European Central Bank policymaker Martin

Kocher warned that further euro strength could force them to

resume interest rate cuts.

The ‌euro zone is a net energy importer, so even slight

currency ​appreciations can significantly lower the price of

energy and ‍other imported goods, which could ⁠push inflation

down.

Austrian central ⁠bank governor Kocher added that the gains

so far in the ‌euro were "modest" and did ​not require a response

yet, but if sharper appreciation lowers inflation projections,

then they may ⁠need to act.

Markets slightly ‍added to ​bets of a rate cut by the summer.

Futures imply about a 25% chance of a ‍rate cut by July, from

around 15% on Tuesday.

Germany's 2-year bond yield, which is sensitive

to changes in ECB rate expectations, fell 2.5 basis points to

2.076%, its lowest level in a week.

Germany's ​10-year ‍yield, the benchmark for the

euro zone, was down 2 bps at 2.854%.

"EURUSD is nearing ​levels where we think the ECB will start

to take notice," Jefferies economist Mohit Kumar said in a note

on Wednesday.

The euro has strengthened sharply against the

dollar in recent days, rising above $1.20 on Tuesday after U.S.

President Donald ​Trump said the value of the dollar was "great".

That pushed the dollar to multi-year lows against a

basket of currencies, including ‍the euro.