* Euro down 0.5 percent at $1.2270
* Stocks turn negative, boosting risk aversion
* Traders wary of pushing aggressively before G20
(Updates prices)
By Tamawa Desai
LONDON, June 25 (Reuters) - The euro fell broadly on Friday after investors pulled back from riskier assets as share prices fell, but the market was wary of chasing prices aggressively ahead of a Group of 20 leaders' summit.
European shares shed early gains to trade down 0.5 percent at 1,015.52, while U.S. stock futures were down slightly.
"A little bit of risk aversion is creeping in, equity markets are under pressure," said Ian Stannard, senior currency strategist at BNP Paribas. "We believe the euro is still vulnerable."
Funding concerns in the euro zone also raised some jitters as banks need to repay some 442 billion euros in one-year loans to the European Central Bank next week.
The euro fell as low as $1.2253, off from the day's high of $1.2351. Stop-loss sales below $1.2300 accelerated declines, traders said.
By 1105 GMT, it had trimmed losses to trade around $1.2270, below where options with a strike price of $1.2300 were set to expire later in the day, traders said.
The single currency was on track to fall 1.2 percent against the dollar on the week, after two previous weeks of gains.
Against the yen, the euro was down 0.3 percent at 110.15 yen , while it hit a lifetime low against the Swiss franc of 1.3510 francs.
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.
Analysts say currency issues were unlikely to come to the fore as China took steps last week to de-peg its currency.
"It was tactical of China to move ahead of the G20 to rule out further pressure about its currency," said Roberto Mialich, currency strategist at Unicredit in Milan.
On Friday, China's central bank set the yuan's daily mid-point at 6.7896 per dollar, the highest level since the July 2005 revaluation. It meant China has allowed its reference rate to rise 0.6 percent this week.
Concerns about sovereign debt and the economic outlook were likely to weigh on riskier assets, with the yen and Swiss franc seen benefitting the most going forward, analysts said.
The dollar, which is also normally seen as a safe haven, may struggle after the U.S. Federal Reserve earlier this week gave a less optimistic view on the economy and reiterated interest rates would remain low for an extended period.
The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.3 percent at 85.990, but remained below the week's high of 86.415.
The dollar stood flat at 89.69 yen, near a 1-month low of 89.22 yen on trading platform EBS on Thursday.
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.
The Australian dollar pared gains to trade down 0.4 percent at $0.8635, near a support level of $0.8600. (Editing by Toby Chopra)