CAD/ILS Outlook:
The CAD/ILS exchange rate is slightly weaker but likely to move sideways, trading below its recent average and near the lower end of its 3-month range. Recent movements in oil prices and trade tensions are affecting the CAD's performance.
Key drivers:
• Rate gap: The Bank of Canada's cautious stance, including a recent interest rate cut, contrasts sharply with the Bank of Israel’s more accommodative policy, affecting the CAD's value relative to the ILS.
• Risk/commodities: The Canadian dollar is under pressure as oil prices, despite being above the recent average, have shown volatility, impacting the currency closely linked to this commodity.
• One macro factor: The recent trade tensions with the U.S. continue to put downward pressure on the CAD, limiting its potential for gains.
Range:
Expect the CAD/ILS movement to hold within its recent range, as current pressures may prevent a breakout.
What could change it:
• Upside risk: A sustained increase in oil prices could bolster the CAD, improving its standing against the ILS.
• Downside risk: Continued import tariffs from the U.S. could further erode the CAD’s value, pushing it lower against the ILS.
