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FOREX-Euro skids to new low ahead of GDP data, dollar shines

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 Euro weakest since April 2017 on growth concerns

* Dollar finds more buyers amid coronavirus worries

* Yen, Swiss franc well supported as investors stay nervous

The euro eased to another nearly three-year low on Friday as investors worried about slowing growth momentum in the euro zone ahead of an estimate of how its economy performed in the fourth quarter.

The European single currency has lost 1% so far this week and is on track for its worst two-week performance since mid-2018. Fourth-quarter gross domestic product data is due at 1000 GMT - economists polled by Reuters expect 0.1% quarter-on-quarter growth, the same as the previous 3-month period.

"The bearish trend on EUR/USD may continue today as growth data out of the euro zone are quite unlikely to improve the grim economic outlook for the area," ING analysts said in a note.

"At this stage, with worries around the negative impacts of coronavirus on the euro zone economy, even some better-than-expected data may not be enough to trigger an inversion in the bearish EUR trend."

The euro fell to $1.0827 EUR=EBS overnight before settling at $1.0841, down marginally on the day.

The single currency has been buffeted by signs of a slowdown in powerhouse Germany and ongoing demand for dollars. Against the Swiss franc, the euro weakened to another 4-1/2 year low of 1.060 francs EURCHF=EBS . about the extent of the coronavirus in China after officials in Hubei announced a sharp increase in new infections and deaths has kept both the safe-haven yen and the dollar well supported. dollar index .DXY ., which measures the currency against a basket of rivals, rose to its strongest since October. It has risen 0.4% this week - on top of gains of 1.3% last week.

As well as euro zone data, traders are also waiting for a batch of U.S. data later in the day including retail sales and industrial production numbers.

The yen JPY=EBS edged up to 109.77 per dollar on Friday, following a 0.25% gain the previous session.

In the onshore market, China's yuan CNY=CFXS slipped 0.06% to 6.9818 per dollar, while its offshore counterpart CNH=EBS clawed back earlier losses and was last at 6.985, following a 0.2% decline on Thursday.

Uncertainty about the real extent of the epidemic is likely to discourage investors from taking on excessive risk until there is sufficient evidence that its spread has slowed.

"There is a return of risk aversion, so yen and other safe-haven assets have risen, but reaction so far has been temporary and limited," said Masafumi Yamamoto, chief currency strategist at Mizuho Securities in Tokyo.

Sterling consolidated gains around the $1.3060 mark GBP=D3 after jumping on Thursday when the announcement of a new British finance minister, an ultra-loyalist to Prime Minister Boris Johnson, raised expectations that the upcoming budget would increase public spending to boost the economy following Britain's Jan. 31 withdrawal from the European Union.

Against the euro, the pound rose 0.1% to 82.995 pence EURGBP=D3 , close to a 2-month high.


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