CAD/CZK Outlook:
Slightly weaker, but likely to move sideways, as the CAD is near its recent average and lacks a clear driver.
Key drivers:
- Rate gap: The Bank of Canada's cautious stance on interest rates contrasts with the Czech National Bank's stable rate, potentially supporting the CZK.
- Risk/commodities: With oil prices currently well above average, the CAD's movements will depend on maintaining this momentum, as Canada relies on oil exports.
- Macroeconomic factor: Weak economic data from Canada, including flatlining growth, continues to put pressure on the CAD compared to the CZK’s more stable economy.
Range:
Expect CAD/CZK to hold within its recent 3-month range as current influences are balanced.
What could change it:
- Upside risk: A significant recovery in oil prices could support the CAD by boosting export values.
- Downside risk: Continued declines in Canadian economic indicators or escalating trade tensions could further weaken the CAD relative to the CZK.