CAD/CZK Outlook: Slightly positive, but likely to move sideways, as the rate is above its recent average and experiencing stable conditions.
Key drivers:
• Rate gap: The Bank of Canada is signaling economic confidence with steady interest rates, while the Czech National Bank remains cautious due to inflation risks.
• Risk/commodities: Rising oil prices are supporting the Canadian Dollar, as Canada is a major oil exporter, benefiting from higher revenues.
• One macro factor: Economic growth in the Czech Republic is projected at 2.4% for 2026, suggesting stability for the Koruna amid ongoing demand.
Range: The CAD/CZK is likely to hold within its recent 3-month range, maintaining stability near current highs.
What could change it:
• Upside risk: Stronger-than-expected oil price increases could lead to further support for the Canadian Dollar.
• Downside risk: If inflation in the Czech Republic rises significantly, it may pressure the Koruna and impact the CAD/CZK exchange rate negatively.