The USD to CZK exchange rate has been influenced by a combination of US economic data and the Czech National Bank's (CNB) monetary policy. Recent analyst forecasts suggest a bearish outlook for the US dollar due to expectations of Fed rate cuts, following a surprising decline in the US consumer price index from 3% to 2.7% in November. Analysts are increasingly pricing in aggressive rate cuts from the Federal Reserve, with speculation of multiple reductions beginning in the first half of 2026. This dovish sentiment has led to a broader weakening of the USD, which has seen it retreat from recent highs.
Conversely, the Czech koruna appears well-supported by the CNB's hawkish stance. The central bank has kept interest rates steady at 3.50% since May 2025 in an effort to combat inflation, particularly from rising wages and services. With inflation concerns intact, the CNB's policy is expected to continue providing a favorable environment for the koruna. UBS has even revised its EUR/CZK forecast to reflect anticipated appreciation for the koruna through 2026, driven by robust economic growth and healthy external balances.
As of now, the USD to CZK is trading at 20.78, nearing its 7-day highs and just below the 3-month average. This range has been relatively stable, fluctuating between 20.53 and 21.25. Analysts suggest that while the USD is under pressure, the koruna's strength could lead to further gains against the dollar if the CNB maintains its current policy path amid ongoing inflation challenges.
Overall, the outlook for USD to CZK remains influenced by shifting dynamics in US monetary policy and the resilient, hawkish approach of the Czech central bank, which keeps the koruna in a stronger position moving forward.
