EUR/CZK Outlook: Slightly positive, but likely to move sideways, as the rate is just above its recent average and near a 3-month high with no clear driver at this moment.
Key drivers:
• Rate gap: The ECB's cautious policy poses challenges for the euro, while the Czech National Bank aims to keep inflation near its target, giving the koruna some support.
• Risk/commodities: The recent rise in oil prices has been significant, as this may influence inflation and economic activity within the Eurozone, indirectly affecting the euro's strength.
• One macro factor: The recent Eurozone GDP growth shows resilience despite economic pressures, which may help stabilize the euro in the near term.
Range: EUR/CZK is likely to hold within its recent 3-month range, showing stability around current levels.
What could change it:
• Upside risk: A stronger-than-expected rebound in German retail sales could support the euro.
• Downside risk: Any significant geopolitical tensions could lead investors to favor other currencies, putting pressure on the euro.
