The CAD to ILS exchange rate has a bearish bias in the near term.
Key drivers include the following:
- Interest rates: The Bank of Canada's rate remains steady at 2.25%, while the Bank of Israel aims for GDP growth of 4.7% in 2026, signaling a favorable outlook for the ILS.
- Risk sentiment: The ILS has strengthened due to decreased geopolitical risks following the Gaza ceasefire, enhancing investor confidence.
- Commodity prices: Oil is trading around $60.82, which is below its 3-month average, impacting the CAD due to Canada’s heavy reliance on oil exports.
In the near term, expect the CAD to ILS trading range to stay stable but slightly lower than recent averages.
Upside risks include a potential rebound in oil prices, which could support the CAD. Conversely, a renewed geopolitical crisis could weigh further on the ILS, causing it to shift the exchange rate dynamics.