Course history

As one of the youngest currencies in Europe, the Czech koruna has a rich history, dating back to the Czechoslovak koruna and the Austro-Hungarian koruna, which was used from 1892 to 1918. After the establishment of Czechoslovakia in 1919, the continued use of the old Austro-Hungarian currency in the Czech Republic and Slovakia prompted the then Minister of Finance to intervene. As a result, the country's borders were closed for more than a week, allowing the exchange of old banknotes for new Czechoslovak crowns. Despite the difficulties, the minister successfully managed inflation while maintaining the stability of the Czechoslovak koruna.

During World War II and in the post-war period, the Czechoslovak koruna underwent a number of transformations. During the war, it was replaced by separate currencies for the Protectorate of Bohemia and Moravia and the Slovak state. After the war, with the restoration of independence, the common currency for Czechoslovakia was restored.

In 1953, the Communist Party of Czechoslovakia introduced a monetary reform, replacing the old koruna with a new one — the third in history. This reform primarily affected the richer Czechs and Slovaks, who could only exchange a limited amount of their savings. This third koruna was in force in the Czech Republic and Slovakia until 1992, when both countries fell apart as a result of the so-called monetary union.

Top currency pairs

Those looking for how to participate in Webinar Universe courses should check if it is possible to trade currency pairs containing CZK. These will be couples such as:

• EUR/CZK (Euro to Czech koruna) – This pair reflects the ratio between the euro and the Czech koruna. It is one of the most actively traded pairs with CZK;
• USD/CZK (US Dollar to Czech Koruna) - This pair shows the ratio between the dollar and the Czech koruna. It is relevant for forex trading;
• GBP/CZK (Pound Sterling to Czech Koruna) - This pair represents the ratio between the British Pound and the Czech Koruna. It is less popular than EUR/CZK and USD/CZK, but it is still a frequently chosen pair to trade;
• CHF/CZK (Swiss Franc to Czech Koruna) - This pair reflects the ratio between the Swiss Franc and the Czech Koruna. It is also chosen by traders, although not as often as the rest of the pairs.

The indicated pairs with the Czech koruna have the highest liquidity on the international market, which we inform you about on our training platform.

Course Factors

The economic situation of the Czech Republic is the main factor determining the exchange rate of the Czech koruna. Stable economic development is conducive to the strengthening of the currency, while economic problems can lead to its weakening. Monetary policy decisions, such as changes in interest rates or asset purchase programs, directly affect the exchange rate of the Czech koruna. The level of inflation in the Czech Republic also plays an important role in shaping the exchange rate. Its low level is usually conducive to its strengthening.

Trade ties with other countries and high exports and foreign investment can also affect the demand and supply of the Czech koruna on the international market. Despite the absence of the Czech koruna in the eurozone, the attitude towards this currency may affect the perception of the stability of the Czech currency, especially in the context of possible accession to the eurozone.

The price of raw materials, such as steel or electronics, can have an impact on the Czech koruna exchange rate, due to the importance of the Czech Republic as an industrial exporter. In addition, global economic factors such as financial crises, pandemics and trade conflicts also affect the exchange rate of the Czech koruna, due to the globalized nature of today's financial markets. By observing the exchange rate of the Czech koruna, investors and entrepreneurs follow not only local events, but also global trends in order to accurately assess the prospects of this currency.

Future predictions

According to the latest survey by Reuters, the Czech koruna and the Polish zloty are expected to see the largest gains among currencies in Central and Eastern Europe in 2024. The Czech Republic koruna is expected to rise by 1.6%, reaching a value of 24.25 per euro. Despite the short-term weakness resulting from interest rate cuts, analysts are confident that the krona will regain its strength thanks to a gradual economic recovery and improved market sentiment.

To sum up, if the Czech economy continues to grow steadily, the Czech koruna could strengthen against other currencies. The decisions of the Czech National Bank (Czech National Bank) regarding interest rates and other monetary policy tools will have a decisive impact on its value. For more information, please refer to the webinars available on Webinar Universe.