Czech Koruna to Stay Sideways vs. Euro as CNB Holds Rate: Commerzbank

Commerzbank’s Tatha Ghose sees the Czech National Bank (CNB) keeping its key policy rate unchanged at 3.75% at the upcoming decision. The analyst characterizes the June rate increase as a one-off fine-tuning move, rather than the beginning of a sustained tightening cycle.

With both headline and core inflation currently inside the central bank’s target range, the CNB has room to wait and assess the outlook. The main risk, according to Ghose, is that policymakers must avoid striking an overly dovish tone that could weaken the koruna.

As a result, the EUR/CZK pair is forecast to stay in a sideways pattern in the near term, with the koruna lacking clear directional catalysts.