The market bias for the CAD to ILS exchange rate remains bearish.
The Canadian dollar (CAD) has recently weakened against the shekel, influenced by three key factors. First, the interest rate differential shows that the Bank of Canada’s policy rate holds at 2.25%, while the Bank of Israel’s positive economic outlook is spurring growth expectations. Second, the CAD is reacting to fluctuations in oil prices, as recent data indicates a slight uptick in oil prices, crucial for Canada’s commodity-linked currency. Third, the stabilization in Israel's geopolitical risk, aided by a recent ceasefire, has enhanced investor confidence in the Israeli new shekel (ILS).
In the near term, the CAD to ILS exchange rate is expected to trade within a tight range. Upside risks include potential Canadian economic data that surprises positively, while downside risks could arise from volatility in oil prices or changes in U.S. dollar strength impacting overall market sentiment.