Czech Koruna Slumps To 4-day Low Against US Dollar And Euro
September 14 2009 - 12:33AM
RTTF2
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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