UBS adjusts EUR/CZK forecasts amid Europe’s positive sentiment

Published 10/03/2025, 10:24
© Reuters.

UBS presented an updated outlook for the Czech koruna, forecasting a somewhat weaker currency against the euro over the coming quarters despite its recent moderate strength.

The koruna’s recent performance has been buoyed by optimistic developments in Europe, including the dynamics surrounding a Ukraine ceasefire, the current lack of tariffs on European goods, and anticipated fiscal spending increases by Germany and the EU in areas such as infrastructure and defense.

The Czech Republic, with its small, open, and manufacturing-focused economy, remains sensitive to potential trade frictions. UBS analysts anticipate that tariffs on Europe are likely, which underpins their expectation of a weaker koruna moving forward.

Reflecting these projections, UBS has updated its end-of-quarter forecasts for the EUR/CZK exchange rate. The new predictions set the rate at 25.4 for the second quarter of 2025, adjusted from a previous forecast of 25.7.

For the third quarter of 2025, the forecast has been revised to 25.6 from 25.8, and for the fourth quarter of 2025 and the first quarter of 2026, the rate is expected to be 25.8.

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