CAD/CZK Outlook: Slightly positive, but likely to move sideways as the rate is above its recent average and near the mid-range of the past three months with no strong drivers identified.
Key drivers:
• Rate gap: The Bank of Canada is retaining higher interest rates to support its economy, while the Czech National Bank has kept rates steady, providing the CAD an edge.
• Risk/commodities: The Canadian dollar benefits from rising oil prices, which are trading at recent highs. As a major oil exporter, this uptrend supports CAD strength.
• One macro factor: The recent trade agreement between Canada and China is expected to boost Canadian exports and enhance economic stability.
Range: The CAD/CZK rate is likely to drift within its stable three-month range, holding above the average.
What could change it:
• Upside risk: A further significant increase in oil prices could boost the CAD sharply.
• Downside risk: A deterioration in global economic conditions or increased trade tensions could weaken the CAD against the CZK.
