GBP/CZK Outlook: Slightly weaker, but likely to move sideways, as the rate trades near its three-month average and is at 30-day lows without major driving factors.
Key drivers:
• Rate gap: The Bank of England is expected to cut interest rates amid slowing inflation, while the Czech National Bank anticipates stable inflation near its target, affecting the relative appeal of the currencies.
• Risk/commodities: Global geopolitical tensions are influencing market confidence, creating volatility that may impact the GBP more than the CZK in these conditions.
• One macro factor: The UK’s manufacturing data showed improvement, but upcoming economic trends suggest that growth could slow, leaving the pound vulnerable.
Range: The GBP/CZK is likely to hold steady within its recent trading range, without significant moves in either direction.
What could change it:
• Upside risk: A surprising increase in UK economic growth data could boost the pound's strength.
• Downside risk: Further cuts to the Bank of England’s rates could pressure the pound lower.
