GBP/CZK Outlook: Slightly positive, but likely to move sideways, given the current level above the 90-day average and the lack of strong drivers.
Key drivers:
• Rate gap: The Bank of England's cautious stance on rate cuts contrasts with the Czech National Bank's steady policy, which keeps the repo rate higher, benefiting the koruna.
• Risk/commodities: With oil prices currently stable, there is no strong pressure on currencies linked to commodities, contributing to a muted GBP performance.
• One macro factor: Ongoing global geopolitical risks continue to impact the GBP, making it sensitive to developments that could divert investor interest.
Range: GBP/CZK is likely to hold near current levels within its recent trading range.
What could change it:
• Upside risk: An unexpected shift in sentiment favoring the GBP amid improving global economic conditions could support stronger gains.
• Downside risk: Further indications of weak UK economic growth or increased geopolitical tensions could lead to a pullback in GBP value.