USD/CZK Outlook:
Slightly weaker, but likely to move sideways, as the rate is below its recent average and near recent lows.
Key drivers:
• Rate gap: The Federal Reserve has kept interest rates steady, while the Czech National Bank maintains its rate to control inflation, leading to shifts in currency value.
• Risk/commodities: Current oil prices remain stable, affecting inflation expectations in both economies and their currencies.
• One macro factor: The U.S. job market showed strength with a significant payroll increase, but geopolitical tensions are triggering a shift away from the dollar.
Range:
The USD/CZK is expected to hold within its recent range as the market lacks strong drivers to trend decisively.
What could change it:
• Upside risk: A surge in U.S. job growth or positive economic data could boost the dollar’s position.
• Downside risk: Heightened geopolitical tensions or negative U.S. economic indicators could put more pressure on the dollar.
