* Better-than-expected German PMI survey helps euro
* Minutes showed Fed debated raising rates earlier
* Norwegian crown hits 2-month high vs euro after growth data (Updates with Norwegian crown, details, quotes)
By Anirban Nag
LONDON, Aug 21 (Reuters) - The euro recovered from a 11-month low against the dollar on Thursday after better-than-expected German private sector growth data, although gains were limited given the numbers did little to alter expectations of more monetary stimulus.
Amongst the biggest movers in the European session was the Norwegian crown which hit a two-month high against the euro after forecast-busting growth data. Norway grew 1.2 in the second quarter, double of expectations, and piling pressure on the central bank to bring forward a rate hike.
The crown also rose sharply against the dollar despite the greenback being the most sought-after of the actively-traded currencies in the past few sessions.
The dollar, buoyed by rising Treasury yields and widening interest rate differentials in its favour, traded just below 11-month peaks against a basket of major currencies, having scaled those highs after minutes of the Federal Reserve's July meeting, released on Wednesday, sounded slightly hawkish.
In the euro zone, Germany's private sector grew for a 16th month running in August, suggesting Europe's largest economy could expand robustly in the third quarter after it surprisingly contracted in the second.
Data from France showed business activity was stagnant in August, although service sector growth picked up.
While the composite euro zone survey showed activity slowing in August, it offered some relief to the single currency, as some had feared a far worse reading.
The euro rose 0.1 percent to $1.3278 after the German survey, having hit an 11-month low of $1.3242 in Asian trade. It was last trading at $1.3265, steady on the day.
The single currency has shed 1.2 percent in the past week as the dollar rallied on better-than-expected housing data. Falling German bund yields, lower money market rates, and a narrowing euro zone current account surplus helped push the euro lower.
"The German data was better than expected, but it is clear that economic momentum is declining from a month earlier. While the euro can bounce a bit, the upside is rather limited from here," said Yujiro Goto, currency analyst at Nomura.
"The euro should be on a gradual declining path."
RISING U.S. YIELDS
The euro's bounce saw the dollar index slip to 82.253, having earlier hit 82.364, its highest since September. It broke out of the 81.188/81.716 range that held for much of this month.
The Fed minutes showed policymakers debated whether interest rates should be raised earlier given a surprisingly strong jobs market recovery. Most officials, however, wanted further evidence before changing their view.
In any case, U.S. Treasury yields rose. Two-year yields hit a two-week high just shy of 0.5 percent.
That underpinned the dollar, which touched its highest in over four months against the yen at 103.965, not far from the April peak of 104.13. A break there could see the market aim for the 2014 high of 105.45 set in January.
Despite overall dollar bullishness, the greenback underperformed the Norwegian crown. Norway's crown rose to a two-month high of 8.1565 crowns per euro on solid volumes and analysts said more gains are likely in store.
"Today's growth figures are likely to carry momentum. We continue to hold longs in Norwegian crown versus the Swedish crown, but nearer term strength may be more pronounced against euro with euro/Norwegian crown eyeing lows on the year around 8.10-8.11," said Josh O'Byrne, analyst at Citi.
(Editing by Nigel Stephenson and Toby Chopra)