An Etymological Dictionary of the German Language/schlau
schlau, adj., ‘sly, crafty, cunning,’ early ModHG. only, formed from LG. slû; comp. Du. sluw, ‘sly’; akin also probably to OIc. slœ́gr, MidE. sleigh, E. sly, which, as ModHG. verschlagen, ‘cunning,’ indicates, is perhaps connected with the root slah, ‘to strike.’ It is uncertain how far these terms are due to earlier loan-words, and whether OIc. slœ́gr is the ultimate source of them all.