USD/CZK Outlook:
Bearish, as the rate is below its recent average and near the recent lows.
Key drivers:
• Rate gap: The U.S. Federal Reserve has paused rate cuts while the Czech National Bank keeps rates steady, creating a supportive environment for the koruna.
• Risk/commodities: Current oil prices are steady, reducing volatility that could impact the USD's strength against the koruna.
• One macro factor: Recent job data in the US has raised concerns about consumer spending, which could further weaken the dollar.
Range:
The USD/CZK is likely to drift within its recent 3-month range, lacking significant directional movements.
What could change it:
• Upside risk: A surprising improvement in U.S. non-farm payroll data could boost the dollar's value.
• Downside risk: Any renewed geopolitical tensions or trade policy concerns could further pressure the dollar lower.
