CAD/CZK Outlook:
Slightly positive, but likely to move sideways, as the rate is near its recent average and lacks a clear driver.
Key drivers:
• Rate gap: The Bank of Canada is maintaining a cautious stance, while the Czech National Bank's rates remain stable, indicating diverging monetary policies.
• Risk/commodities: Although oil prices are currently above their average, the recent dip to 7-day lows creates uncertainty for the Canadian dollar's strength.
• One macro factor: The IMF has advised the Czech National Bank to normalize its balance sheet gradually, potentially influencing the koruna's performance.
Range:
Movement is likely to test the recent stable range, with chances of holding steady within the current levels.
What could change it:
• Upside risk: A strong recovery in oil prices could bolster the Canadian dollar significantly.
• Downside risk: Further escalation in trade tensions between the U.S. and Canada may weaken the CAD against the CZK.
