The exchange rate forecast for the Canadian dollar (CAD) to Israeli new shekel (ILS) suggests a cautious outlook influenced by both domestic and international factors. Current CAD trading sits at 2.4077, which is 2.3% below its three-month average of 2.4643, reflecting notable volatility in the market with fluctuations between 2.3964 and 2.6482. This decline is primarily attributed to weakening oil prices, a crucial factor for the CAD as Canada is a major oil exporter. Recent oil prices have been notably volatile, currently at 66.99, which is 2.9% below the three-month average of 68.98, trading within a substantial range of 65.50 to 78.85.
Analysts have expressed bearish sentiments towards the CAD, with non-commercial net short positions rising significantly. This trend follows disappointing job reports from both Canada and the U.S., which have fostered expectations of interest rate cuts in the coming months. Interestingly, despite the prevailing bearish sentiment, some forecasts indicate potential CAD strengthening in the medium term, with a Reuters poll projecting that the loonie may appreciate to around 1.36 per U.S. dollar in three months and to approximately 1.3415 in a year. These projections hinge on expectations that the Bank of Canada's interest rate cuts may be nearing their end.
Conversely, the Israeli new shekel (ILS) has shown considerable strength, reaching its highest level against the U.S. dollar since late 2022, buoyed by decreased geopolitical tensions and strong economic fundamentals. Furthermore, a surge in foreign investment into Israeli markets has helped support the shekel, adding to the ILS's positive momentum. UBS has revised its USD/ILS forecasts, anticipating a decline to 3.20 by the second quarter of 2026, which suggests ongoing strength for the ILS.
In summary, the CAD to ILS rate is expected to be influenced by fluctuating oil prices, interest rate expectations from the Bank of Canada, and the relative strength of the shekel bolstered by positive economic indicators and foreign investment. This interplay will be critical for those engaged in international transactions between Canada and Israel.
