High oil prices and a weakening euro helped push the euro-zone's current account deficit in August to the highest level in four and a half years, European Central Bank (ECB) figures showed yesterday.

Net investment also flooded out of the region in August as euro-area residents snapped up foreign debt securities, which yield more than euro-zone instruments, the monthly balance of payments data showed.

These factors contributed to the euro-zone's seasonally adjusted current account gap widening to €6.6 billion in August, from €4.7 billion in July, the biggest deficit since December 2000.

While the euro zone is still running a small surplus cumulatively over the past 12 months, the size has narrowed considerably -- to less than 0.1 per cent of euro zone GDP, down from 0.6 per cent of GDP a year earlier.

"In Euroland ... a lot of the deterioration in the current account balance has to do with oil," Morgan Stanley currency strategist Stephen Jen said.

Crude oil hit record highs above $70 (€58.40) barrel at the end of August amid fears about the impact of hurricanes in the Gulf of Mexico.

The weakening euro, which fluctuated between $1.21 and $1.25 in August, down from $1.36 at the start of the year, also makes oil, which is priced in US dollars, even more expensive to import.

Additionally, Steve Barrow, currency analyst at Bear Stearns in London, said the lag effect of the euro strength is dampening export numbers. An expensive currency discourages export demand, but there is often a six-month lag before it shows in data.

"The euro is a lot weaker this year and it's proved to be of some minor benefit (to exports), but I'd be surprised if we see any improvement in trade as a result," he said.

"There is a very lagged impact from currencies... one reason for that is that a lot of exporters and importers get locked into exchange rates for a long period of time."

The ECB figures showed financial investment flowed out of the euro zone at a faster rate in August, with a net loss of €31.8 billion, from €5.8 billion in July, not allowing for seasonal factors.