FOREX-Euro near 3-year low on sluggish growth, yen steady despite weak GDP

* Euro near 33-month low as growth stagnates in euro zone

* Market sees soft US data as driven by one-off factors

* Yen shows limited response to poor Japan GDP

* Graphic: World FX rates in 2020 https://tmsnrt.rs/2RBWI5E

By Hideyuki Sano

TOKYO, Feb 17 (Reuters) - The euro was on the back foot on Monday, as concerns mounted about weakening economic growth in Europe at a time financial markets and policymakers fret about a new threat to the global economy from a fast spreading coronavirus in China.

The euro, which hit a 33-month low of $1.0817 on Friday, fetched $1.08385 in early Asian trade on Monday, flat so far on the day but down 2.3% since the start of month.

"Coronavirus is increasingly looking like a long-term issue and thus, at least for currency markets, it will be playing second fiddle," said Kyosuke Suzuki, manager of currencies at Societe Generale.

"In contrast, sentiment on the euro is becoming clearer, with weak economic fundamentals helping to push it down," said Kyosuke Suzuki, manager of currencies at Societe Generale.

The German economy stagnated in the fourth quarter due to weaker private consumption and state spending, data showed on Friday, renewing fears of a recession at a time Chancellor Angela Merkel's conservatives are preoccupied with a search for a new leader.

Europe's biggest economy posted zero growth from the previous quarter while separate data showed euro zone gross domestic product grew 0.1% quarter-on-quarter in the fourth quarter, in line with forecasts but the weakest since 2014.

Most market players expect stronger growth in the United States although data published on Friday provided a mixed picture.

U.S. core retail sales was flat last month, lagging expectations of 0.3% growth while its rise in December was revised down to 0.2% from a previously reported 0.5%.

Industrial production also shrank more than expected by 0.3%.

Still, economists have blamed one-off factors such as warm weather and output suspensions stemming from troubles at Boeing (BA) for the downbeat numbers.

The dollar index stood at 99.131, near Friday's 4 1/2-month high of 99.241.

Japan's economy was also under increasing strain, with GDP figures released on Monday coming in far below economist' forecasts, hitting Tokyo shares even though reaction in the currency market was muted.

The world's third-largest economy shrank 1.6% in the three months to December, the largest drop in six years, hit by sales tax hike.

The yen stood at 109.81 yen per dollar, little moved in a tight range for more than a week.

The Australian dollar held firm as investors assessed the latest reading on coronavirus cases in China's Hubei Province, the epicentre of the outbreak.

The province reported 1,933 new cases, up slightly from the previous day, bringing the total so far to more than 58,000, but the number of new deaths fell to 100 from 139.

The Australian dollar fetched $0.67155. The currency, which is used as a proxy for risk on Chinese assets because of Australia's high trade exposure to the Asian giant, has partly been supported by expectations of stimulus from Beijing.

The offshore yuan was also slightly higher at 6.9857 yuan per dollar. (Reporting by Hideyuki Sano Editing by Shri Navaratnam)

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