GBP/CZK Outlook:
Slightly positive, but likely to move sideways due to the rate being above the recent average and the lack of a clear driving force.
Key drivers:
• Rate gap: The Bank of England has signaled a cautious stance with steady rates, while the Czech National Bank maintains its repo rate aimed at controlling inflation.
• Risk/commodities: A stable oil price environment supports the Czech koruna, while fluctuations impact the broader economic outlook.
• One macro factor: The upcoming UK GDP figures may influence GBP positioning, particularly if results are unexpectedly strong or weak.
Range:
The GBP/CZK is likely to test extremes, remaining within the recent 3-month range.
What could change it:
• Upside risk: Stronger-than-expected UK economic data could bolster the pound.
• Downside risk: Continued political uncertainty in the UK or negative GDP results could weigh on GBP.