CAD/ILS Outlook:
Bearish, as the rate is below its recent average and near recent lows.
Key drivers:
• Rate gap: The Bank of Canada maintains a cautious approach, while the Bank of Israel recently cut interest rates, creating a divergence that favors the shekel.
• Risk/commodities: Oil prices have shown volatility, recently trading above average, which could impact the loonie negatively as it relies heavily on oil exports.
• Macro factor: Recent data indicates Canada's economy flatlined in November, limiting support for the CAD.
Range:
The CAD/ILS is likely to drift within its recent range, given the current market pressures.
What could change it:
• Upside risk: A significant rebound in oil prices could improve CAD's performance.
• Downside risk: Continued weakness in Canada's economic indicators could further weaken the loonie.
