Bias: bearish-to-range-bound, current AUD/ILS is below its 90-day average and sits in the lower half of the 3-month range.
Key drivers:
- Rate gap: the RBA signals possible tightening in 2026 while the Bank of Israel cut rates, widening the policy gap and nudging AUD higher against ILS, though moves stay muted.
- Risk/commodities: softer China inflation dampens demand for Australian exports, cooling AUD's fundamentals, while the ILS benefits from domestic easing.
- One macro factor: Australian CPI and jobs data due soon could tilt near-term bets on the RBA path.
Range: likely to drift toward the lower end of its 3-month range, with only small intraday moves unless new data or events emerge.
What could change it:
- Upside risk: a hotter-than-expected Australian inflation print or stronger jobs data could push the RBA toward tightening, lifting AUD/ILS.
- Downside risk: further rate cuts from the Bank of Israel or clearer Israeli growth weakness could lift ILS further and push AUD/ILS lower.
