CZK: Core inflation guides cautious CNB – ING

💡 DMK Insight

Czech inflation forecasts are shifting, and here’s why that matters for traders: With ING’s David Havrlant predicting headline inflation could drop to around 1% by summer 2026, traders should keep a close eye on how this impacts the Czech koruna and related assets. Easing food prices are a significant driver, and if core inflation follows suit in the latter half of the year, it could signal a more stable economic environment. This might lead to a stronger koruna, making it a potential buy for forex traders looking for undervalued opportunities. But don’t overlook the risks—if inflation doesn’t decelerate as expected, or if external factors like energy prices shift unexpectedly, the koruna could face volatility. Watch for key economic indicators in the coming months, especially any shifts in consumer spending or production costs that could influence inflation trends. The real story is how these predictions play out against the backdrop of broader European economic conditions, particularly with the ECB’s monetary policy. Keep an eye on the koruna’s performance against the euro, especially if it approaches key resistance levels in the coming weeks.