NEW YORK, June 25 (Reuters) - The dollar climbed against the euro and fell against the yen on Friday as investors sought safety on concerns about euro zone fiscal strains and data showing soft U.S. economic growth.

Funding issues 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 was on the back of a U.S. government report that showed gross domestic product (GDP) growth slower than previously expected in the first quarter and cuts to estimates for business and consumer spending.

Both factors prompted risk aversion. A weekend meeting of the Group of 20 rich and developing nations is unlikely to produce any surprises, analysts say, but added to the overall cautious tone.

A bit of a disappointment with this (GDP) report, 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 supports 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. Midway through the New York trading session it had trimmed losses to trade around $1.2295, down 0.3 percent.

The single currency was on track to fall 1.2 percent against the dollar on the week, snapping two straight weekly gains.

Against the yen, the euro was down 0.5 percent at 109.84 yen EURJPY=, while it hit a lifetime low against the Swiss franc of 1.3468 francs EURCHF=, according to Reuters data and electronic trading platform EBS EURCHF=EBS.

The dollar fell to 89.34 yen JPY= down 0.2 percent on the day. It was the fourth straight daily drop of the dollar against the yen and at 1.3 percent for the week, the third straight week of declines, according to Reuters data.

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 touched May 6 on electronic trading platform EBS JPY=EBS. It touched 88.00 based on Reuters data that day.

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.

A U.S. survey released on Friday showing U.S. consumer sentiment rose in June to its highest since January 2008 while reports of job losses were down sharply from a year ago had little impact on trading.

(Additional reporting by Vivianne Rodrigues and Steven C Johnson) (Reporting by Nick Olivari; Editing by Andrew Hay)

China Vs