Investing.com - The Russian rouble fell to fresh record lows
against the dollar on Monday as escalating tensions over the
conflict in Ukraine pressured the currency lower.
USD/RUB hit highs of 37.50 and was last up 1.07% to 37.44 from
37.05 late Friday.
Investors were continuing to monitor the situation in Ukraine
ahead of negotiations between Ukrainian and Russian officials and
pro-Russian separatists after talks last week resulted in no major
Earlier Monday, Ukrainian troops lost ground around the eastern
city of Luhansk following overnight clashes with pro-Russian
The conflict broke out in March after Russia's annexation of
Ukraine's Crimea region.
Ukraine and the West blame Russian military support for the
separatist's gains in eastern Ukraine, claiming that Russian troops
have entered the conflict to support them.
Over the weekend European Union leaders threatened to impose a
new round of sanctions on Russia if Moscow does not end its support
for the rebels.
The rouble also fell to record lows against the euro, with
EUR/RUB touching highs of 49.29 before retracing some of those
gains to trade at 49.06.
The euro's gains were held in check amid mounting expectations
for quantitative easing by the European Central Bank after data
last week showed that the annual rate of inflation in the euro zone
slowed to a five year low of 0.3% last month.
The ECB targets an inflation rate of close to but just under
Concerns that sanctions against Russia would act as a drag on
growth in the euro zone have also weighed on the single currency in
Data on Monday confirmed that Germany's economy contracted by
0.2% in the second quarter, in line with forecasts and unchanged
from a preliminary estimate.
Separate reports showed that Germany's manufacturing sector
expanded at the slowest pace in 11 months in July, while factory
activity in France contracted at the quickest pace in 13 months,
adding to the view that the recovery in the region is losing
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