FOREX-Euro struggles near 3-year low as traders fret about economic slowdown

* Euro near 33-month low as growth stagnates
* Dollar holds recent gains; quiet start to shortened week
* Yen shows limited response to poor Japanese GDP data
* Graphic: World FX rates in 2019 http://tmsnrt.rs/2egbfVh

(Adds new quotes, details, latest FX prices)
LONDON, Feb 17 (Reuters) - The euro struggled near 3-year
lows on Monday as investors worried about weakening growth in
the region, while Chinese efforts to limit the damage from a
coronavirus outbreak appeared to calm markets, with the yuan and
Australian dollar gaining.
Monday is light on economic data but traders are looking to
a German business sentiment indicator due on Tuesday and
purchasing managers index flash data on Friday for further
evidence on the state of the euro zone economy.
Last week data showed in particular that momentum in
Germany, the region's powerhouse economy, was struggling.
"EUR/USD seems to be comfortably trading around its new lows
and in the next few days we expect to see a continuation in the
recent downtrend rather than any clear rebound," said ING
analysts.
"The fears around the coronavirus impact on the Eurozone
economy remain well in place while data this week should be in
line with latest releases in providing a non-encouraging
picture."
The euro nudged higher to $1.0845 EUR=EBS in early trading
but had earlier touched $1.0817, its weakest since mid-2017.
The currency has lost 2.3% of its value against the dollar
so far in February.
Kit Juckes, an analyst at Societe Generale, said that while
data shows that the market is building a short euro position,
"it remains a long way from its peaks". was a quiet start to the week elsewhere, with much of the
United States off for a public holiday.
The yen was unfazed by weak economic growth data in Japan.
It traded down 0.1% at 109.84 yen per dollar JPY=EBS .
Japan, the world's third-largest economy, shrank 1.6% in the
three months to December, the largest drop in six years, hit by
a sales tax hike. With growth faltering in the euro zone and Japan, most
market players expect the U.S. economy to remain stronger among
its developed world peers, although retail sales and industrial
production numbers on Friday were disappointing. The dollar index .DXY stood at 99.095, near Friday's
4-1/2-month high of 99.241.
The Australian dollar strengthened as investors assessed the
latest reading on the coronavirus in China, where the number of
cases rose but new deaths dropped. The Australian dollar, used as a proxy for risk on Chinese
assets, rose 0.1% to $0.6724 AUD=D3 . The currency has partly
been supported by expectations of stimulus from Beijing.
The offshore Chinese yuan CNH=EBS gained 0.2% to 6.9815
per dollar.
Some analysts think the market may be underestimating the
hit from the coronavirus on both China's economy and on growth
in the rest of the world, especially Asia.
"For China, our new base case is 3.0% GDP growth in Q1, with
the risk firmly skewed to an even lower number - too much damage
has already been done and initial policy stimulus will not be
very effective," Nomura strategists said in a research note.
Sterling slipped 0.2% to $1.3015 GBP=D3 , reversing some of
its gains last week when the appointment of a new British
finance minister raised expectations that the government would
significantly lift public spending in next month's budget.

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