Bias: range-bound, current level near its 90-day average and in the mid-range of the last three months, suggesting limited sustained moves.
Key drivers:
Rate gap: The ECB is expected to keep policy steady while the CNB remains cautious on easing, keeping EUR/CZK from a decisive move.
Risk/commodities: Oil staying above its longer-term average with added volatility tends to weigh on the euro more than the koruna, limiting EUR strength.
Macro: Czech inflation staying around the target and solid domestic growth reinforce the koruna’s resilience and reduce easing risk.
Range: Expect EUR/CZK to drift within the 3-month range, with moves centered near the middle rather than testing extremes, accounting for mixed data.
What could change it:
Upside risk: stronger eurozone data or a hawkish tilt in ECB communications could lift the euro, providing room for EUR/CZK to edge higher.
Downside risk: a further rally in oil or a shift to risk-off mood could weigh on the euro more than the koruna, pushing the pair toward the lower end of the range.
