EUR/CZK Outlook:
Slightly positive, but likely to move sideways, as the rate is near its recent average and lacks a clear current driver.
Key drivers:
• Rate gap: The European Central Bank's decision to maintain interest rates contrasts with the Czech National Bank's consistent repo rate, influencing currency stability.
• Risk/commodities: Current oil prices are above their average, which may support the koruna indirectly through inflation management, impacting the EUR within this pair.
• One macro factor: Easing inflationary pressures in the Czech Republic have led to a positive adjustment in forecasts for the koruna, bolstering its standing against the euro.
Range:
The EUR/CZK is expected to hold within its recent stable range, with slight fluctuations around current levels.
What could change it:
• Upside risk: A sudden rise in eurozone economic indicators could shift the euro higher.
• Downside risk: Heightened geopolitical tensions or renewed concerns about the Eurozone economy may weaken the euro further.
