AUD/ILS Outlook: Slightly positive, but likely to move sideways, as the rate is just above its recent average with no strong direction.
Key drivers:
• Rate gap: The Reserve Bank of Australia is considering a rate hike due to rising inflation, while the Bank of Israel recently cut rates amidst easing inflation.
• Risk/commodities: A decline in commodity prices has pressured the Australian Dollar, impacting its strength as a commodity currency.
• One macro factor: Weak factory activity reports from China could further dampen demand for Australian exports, negatively impacting the AUD.
Range: The AUD/ILS rate is expected to move within its recent range, holding steady as it adjusts to mixed signals.
What could change it:
• Upside risk: A surprise increase in Australian interest rates could bolster the AUD significantly.
• Downside risk: Continued decreases in commodity prices or poor economic indicators from China could drag the AUD lower.