* Single currency drops to lowest since March 25
* Euro zone PMI sinks to lowest since at least 1998
* Investors await EU meeting
* Dollar down vs Russian rouble, Mexican peso and Norwegian
crown
* Graphic: World FX rates in 2020 https://tmsnrt.rs/2RBWI5E
By Tom Wilson
LONDON, April 23 (Reuters) - The euro fell to its lowest in
a month on Thursday after data showed economic activity in the
euro zone virtually halted by government-imposed lockdowns to
stop the coronavirus pandemic.
The single currency dropped 0.6% against the dollar
EUR=EBS to its lowest since March 24, after IHS Markit's Flash
Composite Purchasing Managers' Index (PMI) sank to by far its
lowest reading since the survey began in 1998. The euro was last at $1.07795, with investors awaiting the
result of a meeting of European Union leaders on the bloc's
response to the economic turmoil caused by the pandemic.
The summit will bring a move towards joint financing to help
the bloc recover from a forecast deep recession caused by the
pandemic by asking the European Commission to propose a fund big
enough to target the most affected sectors and regions.
But uncertainty remains over how far EU governments will be
prepared to share the burden.
"The proposed Recovery Fund could help, but a lot will
depend on its size, conditions and debt mutualization," Bank of
America analysts wrote.
"We do not see a strong consensus to mutualize this debt."
The euro fell 0.6% against the pound EURGBP=D3 to 87.7240
pence, with sterling gaining even after UK preliminary PMI
readings for April fell far below even the most pessimistic
forecasts. European stocks .STOXX rose 0.2%, erasing earlier losses
as energy shares jumped. SLIPS AS OIL RISES
Elsewhere, the dollar slipped against the currencies of
oil-producing states as a bounce in crude prices gave succour to
markets shaken by the massive coronavirus-induced drop in
demand.
The Norwegian crown, Russian rouble and Mexican peso all
gained as Brent crude LCOc1 rallied on tensions in the Middle
East and signs that producers were cutting production to address
collapsing demand for fuel.
In volatile trading, Brent crude LCOc1 soared as much as
15%, bouncing back from its lowest level since June 1999. It was
last up 9.1% at $22.23 a barrel. O/R
The greenback fell 1% against the rouble to 75.1017 RUB= ,
and by 0.8% against the crown NOK= to 10.7061, pulling back
from a one-month high reached a day earlier.
Against the peso MXN=D3 it fell 0.8% to 24.4640,
retreating from a two-week high hit earlier.
The gains for oil came as major economies have been brought
to a virtual standstill, with severe restrictions on businesses
and travel aimed at limiting the spread of the novel coronavirus
hitting commodity currencies.
As a result, analysts said, the boost for commodity
currencies was not likely to last.
"The demand contraction is a far more compelling story than
the production cuts, and that will remain the dominant
influence," said Derek Halpenny, EMEA head of research for MUFG.
The dollar was up 0.1% against a basket of currencies
=USD , lasting trading at 100.620.
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Volatility for oil producers' currencies IMAGE https://tmsnrt.rs/2VRMBwN
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