Monday during early deals, the Czech koruna slumped to a 4-day low against its US and European counterparts as the Czech retail sales dropped for a tenth month in July.

A report released by the Czech Statistical Office revealed that retail sales in the country dropped a seasonally non-adjusted 4.9% year-on-year in July, the same as in the previous month. The decline was largely due to weaker performance in the sale of motor vehicles and the non-food goods, the statistical office said.

The latest drop, measured in constant prices, marked the tenth consecutive month of year-on-year decline in sales. Economists were expecting a much sharper drop of 7%.

On a monthly basis, retail sales including automotive segment increased by a seasonally adjusted 1.1% in July.

Against its European counterpart, the Czech currency tumbled to a 4-day low of 25.5445 during Monday's early trading. If the Czech currency slides further, 25.58 is seen as the next likely support level. At Friday's New York session close, the pair was quoted at 25.4760.

On the economic front, a report from the Eurostat showed that Eurozone industrial production slipped 0.3% in July from the previous month compared to a revised 0.2% drop in June. The statistical office revised the monthly fall for June from the initial estimate of 0.6% fall. The decline in July matched economists' expectations.

Annually, industrial output was down 15.9% in July, while economists were looking for an annual 16.7% drop. The decline for June was revised to 16.7% from 17%

The Czech koruna fell sharply against its US counterpart during Monday's early European deals. The Czech currency hit a 4-day low of 17.5870 against the dollar, and 17.78 is seen as the next downside target level. This may be compared with last week's close of 17.4830.

There are no major economic reports due from U.S. today, so investors will closely watch the speeches by Richmond Federal Reserve Bank President Jeffrey Lacker and the San Francisco Fed's president Janet Yellen in the afternoon New York deals.

Reviewing the economic reports released from the Czech Republic last week, the Czech National Bank report showed that the current account deficit narrowed to CZK 3.05 billion in July from CZK 18.79 billion in June. The expected deficit for July was CZK 3 billion. Another report said that the industrial production dropped 18.2% year-on-year in July, revised from 18.4% fall estimated initially. Industrial production was down 11.8% in June.

But the the Czech Statistical Office announced that the consumer price index or CPI rose 0.2% year-on-year in August, slower than the 0.3% growth seen in the previous month. This was the lowest level since September 2003. Economists were looking for an increase of 0.3%. These figures confirm that any speculation that the CNB might act soon in terms of unwinding very low interest rates appears pre-mature.

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