* Euro/dlr down 1 percent at $1.2688
* GDP data confirms single currency zone in recession
* Higher European shares do little to boost risk demand
* Investors await G20 meeting in Washington
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By Veronica Brown
LONDON, Nov 14 (Reuters) - The euro fell against the dollar and the yen on Friday, brushing off a rise in European shares with risk aversion running high as data confirmed the single currency zone had slid into recession.
Figures earlier in the day showed France had managed to eke out positive growth in the third quarter, but separate data put the euro area in its first ever technical recession after German growth figures on Thursday confirmed two consecutive quarters of contraction.
The euro zone economy contracted 0.2 percent for the second time in a row quarter-on-quarter in the July-September period, an official estimate showed.
"The presumption has to be that the news flow for Q4 isn't getting any better. It's still all about risk and deleveraging," Rabobank markets strategist Jeremy Stretch said.
"The ECB perhaps are still to get on top of the potential downside risks for the economy so there's still a lot of pressure to be seen on monetary policy," he added.
By 1142 GMT, the euro was 1 percent lower on the day at $1.2688, nearing a two-week low of $1.2387 hit on Thursday.
The single European currency also struggled against the low-risk, low-yielding yen, falling 1.4 percent to 123.02 yen. A near-3 percent rise in European shares offered little joy to the struggling euro.
Despite its broad weakness, the euro hovered near a record high against sterling hit the previous day as investors are convinced a recession in the UK will be more severe than in the euro zone. The pair traded at 85.69 pence, near an all-time high of 86.62 pence.
Sterling suffered across the board, hovering near a 6-1/2 year low against the dollar of $1.4555 hit on Thursday.
The dollar fell 0.6 percent to 96.95 yen.
G20 AHEAD
Traders said deleveraging and risk aversion would continue to dominate sentiment in volatile trade as markets anticipate the G20 meeting in Washington later in the day.
Heading into the G20, analysts were wary on prospects for the event to yield major changes in the international financial structure, which would likely keep investors away from taking on risky positions and continue to boost the dollar and the yen.
"The best that might occur would be a reiteration of commitments by governments to cooperate in reigniting global activity and possibly some increase in support for IMF lending from large surplus/reserves rich countries," analysts at Barclays said in a research note.
They added the risks stemming from the gathering included the possibility disagreements between nations on the causes of the crisis and long-term financial market reforms obscure the common ground on immediate policy needs, which could slow the recovery of the financial system.
(Reporting by Veronica Brown; Editing by Ron Askew)