CAD/ILS Outlook:
Slightly weaker, but likely to move sideways, as the rate is below its recent average and lacks a clear driver.
Key drivers:
• Rate gap: The Bank of Canada is taking a cautious stance with steady interest rates, while the Bank of Israel recently cut rates, favoring ILS over CAD.
• Risk/commodities: Oil prices are currently at seven-day highs and significantly above their three-month average, potentially bolstering the CAD if sustained.
• One macro factor: The surprise interest rate cut by the Bank of Israel is expected to further strengthen the shekel, impacting CAD/ILS rates.
Range:
The CAD/ILS is likely to drift within its recent stable range as current dynamics unfold.
What could change it:
• Upside risk: A sustained rise in oil prices could strengthen the CAD.
• Downside risk: Further rate cuts from the Bank of Israel could bolster the ILS against the CAD.