Czech Koruna Drops To 1-Week Low Against Dollar

[IFX Darika]

The Czech Koruna weakened in Wednesday's early dealings against the dollar and slipped to a 1-week low after a report showed that the Czech March producer prices posted its largest fall since 1991.

The Czech Statistical Office announced that the industrial producer prices dropped 2% year-over-year in March, after falling 0.6% in February. This was the largest annual decline since 1991. Economists were looking a decline of 0.6%. On a monthly basis, producer prices dipped 1.1% in March, in contrast to a 0.3% fall in the previous month.

Another report by the Czech Statistical Office said that the export price index rose 8.3% year-over-year in February, larger than the 3.3% increase in the previous month. On a monthly basis, export prices increased 3.7% in February, after rising 2.3% in January.

The Koruna hit a weekly low of 20.2740 versus the buck, compared to 20.14 hit late Tuesday in New York. On the downside, the next likely support for the Czech currency is seen around the 20.44 level.

Yesterday, the Koruna dropped more than 2% against the dollar as the nation's retail sales declined in the month of February. Adding to the losses, the Czech industrial construction output also dropped in the month of February.

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