Bias: The GBP/CZK pair is range-bound, currently just slightly above the 90-day average and sitting near the middle of the 3-month range.
Key drivers:
• Rate gap: The Bank of England has indicated a cautious stance on future rate cuts, while the Czech National Bank is holding its rates steady, contributing to a stable outlook for the koruna against the pound.
• Risk/commodities: Oil prices are fluctuating but are generally stable, affecting the UK’s trade balance and, consequently, the pound's performance versus the koruna.
• Economic growth: The UK is expected to see slowing GDP growth in 2026, which may weigh on the pound as consumer spending and investment remain subdued.
Range: The GBP/CZK pair is likely to hold within its recent tight range as broader FX trends will influence movement rather than individual currency fluctuations.
What could change it:
• Upside risk: Strong UK economic data could boost the pound against the koruna.
• Downside risk: Further geopolitical tensions or poor UK data could negatively impact the pound’s value.