CAD/CZK Outlook: Slightly positive, but likely to move sideways, as the rate is just above its recent average, lacking a clear driver.
Key drivers:
- The Bank of Canada's steady interest rate policy contrasts with the Czech National Bank's outlook for stable inflation near 2%, highlighting a divergence that supports the CAD.
- Oil prices currently trade above average, benefiting the Canadian economy and providing a backdrop for a stronger CAD, even if volatility remains high.
- Economic growth in the Czech Republic is supported by domestic demand, maintaining a stable outlook for the CZK.
Range: The CAD/CZK is likely to drift within its recent range, reflecting stable trade dynamics without extreme movements.
What could change it:
- Upside risk: A significant rise in oil prices could bolster the CAD further.
- Downside risk: Any negative developments in U.S.-Canada trade relations could weaken the CAD against the CZK.