* Euro hits day's low after weak euro zone output data
* Dollar recovers on profit-taking
* Dollar index up 0.7 pct at 80.185 <.DXY>
* Market awaits two-day G8 finance ministers' meet
(Adds comments, updates prices)
By Tamawa Desai
LONDON, June 12 (Reuters) - The euro fell on Friday, hitting
the day's low against the dollar after a plunge in euro zone
industrial output reminded investors the region's economy
continues to struggle.
Selling in the euro added to a recovery in the dollar, which
fell broadly this week as the market reassessed speculation of a
possible rise in U.S. interest rates later this year.
But movements were limited as investors awaited a G8 finance
ministers' meeting starting later in the day.
Euro zone industrial production dropped 21.6 percent in
April from a year ago, figures showed on Friday, a record drop
that was weaker than forecasts for a 20.2 percent fall.
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"I'm not surprised the figures are poor. The euro zone
economy will suffer, it will suffer more than the rest of the
world, ergo my view that the euro will underperform for quite
some time," said Maurice Pomery, managing director at Strategic
Alpha in London.
By 1120 GMT, the euro fell 0.7 percent to a low of $1.4000
<EUR=>, according to Reuters data.
Sterling <GBP=D4> fell to a session low against the dollar
of $1.6421, in tandem with the euro's falls against the dollar.
The dollar index <.DXY>, which tracks the currency's
performance against six major rivals, rose 0.7 percent to
80.185, pulling away from 79.193 hit on Thursday.
Against the yen, the dollar <JPY=> was up 0.6 percent at
98.14 yen.
AWAITING G8
Currencies are not on the formal agenda of the G8 meet,
which is held in preparation for the G8 leaders' summit in July,
as central bank governors do not participate in the discussions.
But that has not stopped some officials from commenting on
the issue ahead of the two-day meeting ending on Saturday.
"What is damaging for the economy is the volatility of the
currency markets and that is why we are keeping an eye on that
market," a French official told Reuters on Thursday.
Given the U.S. currency's recent slide, authorities may
endorse a stronger dollar, analysts at Calyon said.
"We wouldn't be surprised if the weekend meeting concluded
with the finance ministers singing the merits of a strong
dollar, partly to shore up any lingering worries over demand for
U.S. assets ... but also to provide (euro zone) economies some
support," they said in a note.
British finance minister Alistair Darling said he will press
his G8 colleagues this weekend to speed up clearing up toxic
assets from their banks' balance sheets, in an interview
published in Friday's Financial Times.
Earlier in the week, the Wall Street Journal reported the
Obama administration wanted European countries to put their
banks through more rigorous public stress tests.
That could put pressure on the euro, but it may be limited
unless a concrete timetable emerges, some analysts said.
Many say the dollar's downward trend is likely intact on
views the global recession may be receding.
A G8 source said on Thursday the International Monetary Fund
has raised its global growth estimates for 2010 to 2.4 percent
from 1.9 percent in a previous forecast in April.
(Additional reporting by Naomi Tajitsu; editing by Toby Chopra)
