Recent forecasts suggest a challenging environment for the Canadian dollar (CAD) against the Israeli new shekel (ILS), primarily influenced by declining oil prices and changing monetary policies. Analysts note that the CAD is highly sensitive to oil market fluctuations, and with oil prices falling—currently trading at $64.89, 1.8% below its three-month average—there is potential for further downside pressure on the CAD. This decline has been exacerbated by a five-month low in oil prices, which, along with concerns about global oversupply and ongoing trade tensions, has weakened the ‘loonie.’
The Canadian dollar experienced volatility, currently trading at 2.3180 ILS, which is 3.4% below its three-month average of 2.4001 ILS. Recent developments, such as the Bank of Canada's interest rate cut to 2.5%—the lowest in three years—signal a bearish outlook for the CAD as economic risks and a weakening job market loom. Coupled with uncertainties surrounding U.S.-Canada trade negotiations, the loonie faces further challenges.
In contrast, the ILS has shown resilience, bolstered by a decline in Israel's inflation rate to 2.5% in September 2025, which is within the Bank of Israel's target range. This could prompt considerations for interest rate cuts, potentially strengthening the shekel further. Additionally, improved investor sentiment and reduced geopolitical risk have contributed to the ILS appreciating by approximately 9.3% against the U.S. dollar in the previous quarter.
Experts, including analysts at UBS, anticipate that the shekel will continue to strengthen against the dollar, further squeezing the CAD/ILS exchange rate. The broader economic circumstances surrounding oil prices, interest rates, and regional stability create a complex trading landscape. Therefore, businesses and individuals engaging in international transactions should keep an eye on these evolving factors to strategize effectively and potentially save on currency conversions.
