The market bias for CAD against CZK is currently bearish.
Key drivers include:
- Interest rates: The Bank of Canada maintained its policy rate at 2.25%, while the Czech National Bank's policies suggest stability for the koruna.
- Oil prices: Recent oil trades are at 7-day highs, impacting the CAD as it is a major oil exporter. However, oil remains below its 3-month average, adding pressure.
- Economic growth: Mixed signals from Canadian manufacturing data suggest softer growth, which could affect the CAD's performance.
The near-term range for CAD/CZK is expected to stay around current levels, potentially fluctuating within a 2% range.
An upside risk could arise from stronger-than-expected Canadian job growth, while a downside risk may stem from further declines in oil prices and ongoing weakness in Canadian manufacturing activity.