Analysts indicate that the Australian dollar (AUD) has been experiencing fluctuations due to mixed market sentiment. Recent trading sessions showed the AUD regaining some ground after a stumble influenced by waning risk appetite. The currency has been supported by rising commodity prices and a weaker US dollar, which typically enhances its appeal.
Key factors currently influencing the AUD include Australia’s inflation rate, which reached 3.8% in October 2025, prompting the Reserve Bank of Australia (RBA) to adopt a cautious approach to monetary policy. Additionally, Australia’s strong trade surplus with China, driven by robust demand for commodities, remains crucial despite the geopolitical tensions that pose challenges. The divergence in monetary policy between the RBA and the U.S. Federal Reserve could further impact AUD performance, as the U.S. is perceived to be more cautious about rate cuts.
Furthermore, fluctuations in global commodity prices significantly affect the AUD, given that it is closely tied to exports like iron ore and natural gas. As such, any changes in demand for these commodities can lead to volatility in AUD valuations.
On the other hand, the Israeli new shekel (ILS) has recently strengthened, reaching a three-year high against the US dollar. This bullish trend is attributed to anticipated U.S. interest rate cuts, growing defense exports, and positive foreign investment dynamics. Economic data from the Bank of Israel shows consistent strength in the shekel, with improved fiscal positions and a favorable geopolitical outlook contributing to reduced risk premiums.
UBS has notably revised its USD/ILS forecasts downward, reflecting positive investor sentiment towards Israel amid improved economic fundamentals. This trend could imply a strengthening position for the ILS going forward.
Currently, the AUD to ILS exchange rate is near 7-day highs at approximately 2.1365, aligning with its three-month average after trading in a relatively stable range of 5.1% from 2.0922 to 2.1992. As market dynamics evolve, movements in the AUD will likely remain influenced by commodity prices, U.S. dollar fluctuations, and the broader sentiment towards risk assets, while the ILS may continue to fortify its position based on favorable economic indicators and geopolitical stability.
