CAD/CZK Outlook: The CAD/CZK pair is likely to move sideways, currently trading near its recent average and lacking a clear driver.
Key drivers:
• Rate gap: The Bank of Canada has recently cut interest rates, while the Czech National Bank holds its rate steady, keeping the koruna relatively stronger.
• Risk/commodities: Oil prices are currently above their recent average, which may provide some support to the Canadian dollar, but fluctuating prices create uncertainty.
• One macro factor: The Czech economy is anticipated to grow steadily, backed by strong domestic consumption, supporting the koruna's value.
Range: The CAD/CZK is expected to hold within its recent range, with both currencies showing limited volatility.
What could change it:
• Upside risk: A revival in oil prices could bolster the CAD and push the pair higher.
• Downside risk: Further deterioration in trade relations between Canada and the U.S. could negatively impact the CAD, dragging the pair lower.
