Recent forecasts for the USD to CZK exchange rate reflect a complex backdrop shaped by diverging monetary policies and economic indicators in the U.S. and the Czech Republic. Analysts note that the U.S. dollar (USD) has been generally weakening due to expectations of aggressive interest rate cuts by the Federal Reserve in 2026. Following a surprising drop in the U.S. inflation rate from 3% to 2.7%, traders are increasingly pricing in multiple rate cuts starting as early as March 2026. This sentiment has put downward pressure on the USD, particularly impacting its relative yield advantage in the currency market.
As of early December 2025, the USD to CZK exchange rate was hovering around 20.79, near its recent 7-day highs. This rate is just below its three-month average, which indicates a stable trading range of about 3.5% from 20.53 to 21.25. Experts believe that continued soft economic data, including slowing growth and mixed signals from the labor market, could further constrain the USD's potential for recovery.
On the other hand, the Czech koruna (CZK) is benefitting from a hawkish stance taken by the Czech National Bank (CNB), which has maintained interest rates at 3.50% since May 2025. This policy aims to combat inflationary pressures and bolster the economy. UBS's analysts have revised their EUR/CZK forecasts, projecting a stronger appreciation of the koruna, supported by healthy external balances and economic growth projections of 2.4% for 2025 and 2.2% for 2026.
The overall sentiment in the forex market indicates that with the Fed expected to ease monetary policy and the CNB likely to maintain its hawkish approach, the USD could face additional challenges against the CZK. Forecasters suggest that if the Federal Reserve's measures align closely with ongoing soft inflation prints, the USD may weaken further, making the koruna more favorable in the near term. Keeping an eye on upcoming economic indicators, particularly CPI and PCE prints in the U.S., will be crucial as they could significantly impact these forecasts.
