USD/CZK Outlook: Slightly weaker, but likely to move sideways, as the rate is below its recent average and trading near recent lows without a clear driver.
Key drivers:
• Rate gap: The Federal Reserve's expected rate cuts indicate a softer USD outlook compared to the steady Czech National Bank policy, which is maintaining rates amid inflation concerns.
• Risk/commodities: Current geopolitical tensions involving the US are increasing uncertainty around the dollar, impacting its stability against the koruna.
• One macro factor: The US job market shows signs of strain, with rising jobless claims indicating potential economic trouble ahead.
Range: Movement is likely to drift within the recent range, reflecting minimal volatility.
What could change it:
• Upside risk: Resolution of geopolitical tensions could bolster the USD's value.
• Downside risk: Continued increase in jobless claims or another escalation in geopolitical risks could further weaken the USD.
