USD/CZK Outlook:
The USD/CZK rate is slightly positive but likely to move sideways as it trades near its recent average and is impacted by mixed signals. Although the US dollar is showing strength from positive jobs data, it remains just below its 90-day average.
Key drivers:
- Rate gap: The Federal Reserve's ongoing interest rate strategy is expected to keep the USD relatively strong compared to the stable approach of the Czech National Bank.
- Risk/commodities: Recent oil prices remaining below average may help to retain a cautious outlook for global markets, indirectly supporting the USD's appeal.
- One macro factor: The Czech Republic's stable economic indicators could enhance confidence in the koruna, as projected inflation eases.
Range:
Likely to test extremes within the current 3-month range as both currencies respond to ongoing economic developments.
What could change it:
- Upside risk: A stronger-than-expected US economic performance could further support the USD.
- Downside risk: Persistent weakness in US durable goods orders might pressure the USD lower.
