NEW YORK, June 25 (Reuters) - The dollar rose against the euro and fell against the yen on Friday as investors sought safety amid ongoing concerns about fiscal strains in the euro zone and after a report showed soft U.S. economic growth data.

Funding concerns in the euro zone also prompted caution as banks need to repay some 442 billion euros in one-year loans to the European Central Bank next week.

That's on the back of U.S. government data which showed domestic economic growth was slower than previously estimated in the first quarter as estimates of business and consumer spending were cut.

Both factors prompted a rise in risk aversion.

A bit of a disappointment with this report, said said Matthew Strauss, senior currency strategist, RBC Capital Markets in Toronto. It's on the softer side of expectations and with the recent slew of soft data from the U.S., it actually support this week's FOMC cautious statement. It also supports a risk-off sentiment in the forex markets.

The euro fell as low as $1.2253 EUR=, off from the day's high of $1.2351. In early morning New York trade it had trimmed losses to trade around $1.22298, down 0.3 percent.

The single currency was on track to fall 0.9 percent against the dollar on the week, snapping two straight weekly gains.

Against the yen, the euro was down 0.5 percent at 109.91 yen EURJPY=, while it hit a lifetime low against the Swiss franc of 1.3510 francs EURCHF=.

The dollar fell to 89.40 yen JPY= down 0.1 percent on the day. Dollar/yen options barriers at 89 yen and below are likely to check gains for the Japanese currency in the near-term but some traders said momentum indicated the yen would eventually test the year's high of 87.95 yen hit on May 6.

G20 EYED

Market players were wary of a lack of consensus at the G20 summit with open disagreements about how quickly to shrink government deficits, how best to strengthen banks so they can withstand any new downturn, and how to harmonize financial regulatory reforms.

U.S. lawmakers hammered out a historic overhaul of financial regulations as dawn broke over Capitol Hill on Friday, handing President Barack Obama a major domestic victory on the eve of a global summit devoted to financial reform.

Analysts say currency issues were unlikely to come to the fore as China took steps last week to de-peg its currency.

On the G20, I don't expect too much, because the big announcement already happened last week wth China saying it would let its currency strengthen a bit, said John Doyle, senior currency strategist at Tempus Consulting in Washington.

On Friday, China's central bank set the yuan's daily mid-point CNY=SAEC at 6.7896 per dollar, the highest level since the July 2005 revaluation. It meant China has allowed its refe rence rate to rise 0.6 percent this week. (Additional reporting by Vivianne Rodrigues and Steven C Johnson) (Reporting by Nick Olivari)

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