The exchange rate forecast for the Canadian dollar (CAD) against the Israeli new shekel (ILS) reflects a combination of recent economic data and broader market trends. As of the latest data, CAD to ILS stands at 2.3277, which is notably 1.5% lower than its three-month average of 2.3622. This indicates a relatively stable trading range over the past months, with fluctuations between 2.2856 and 2.4589.
Recent declines in oil prices have added pressure to the CAD, which is closely linked to Canada's status as a major oil exporter. The latest data shows oil trading at $62.38 per barrel, approximately 4.1% below its three-month average of $65.05, contributing to the muted performance of the loonie. Analysts have indicated that falling oil prices can lead to depreciation of the CAD due to reduced revenues from this vital export.
The performance of the CAD is further affected by the recent cuts in interest rates by the Bank of Canada, reducing the policy rate to 2.25% amid concerns over a slowing economy. This easing of monetary policy generally weakens the currency as it encourages less investment. In contrast, the ILS has experienced strengthening, partly due to a decline in inflation, which stood at 2.5% in September. This has led to speculation of potential interest rate cuts by the Bank of Israel, which could further support the shekel.
Additionally, the recent ceasefire in Gaza has diminished Israel's geopolitical risk premium, leading to an appreciation of the ILS against the US dollar. UBS has also revised its forecasts downward for USD/ILS, indicating a positive outlook for the shekel bolstered by strong economic fundamentals and improved investor sentiment.
In light of these dynamics, the outlook for CAD against ILS remains complicated. Factors such as oil price movements, interest rate policies, and global economic conditions will be crucial in shaping the future trajectory of this currency pair. Investors and businesses engaging in international transactions should closely monitor these developments to make informed decisions.
