The current market bias for the EUR to ILS exchange rate is range-bound.
Key drivers include:
- Better interest rate prospects for the ILS support its recent appreciation against the euro.
- Improved investor sentiment following a ceasefire in Gaza has reduced geopolitical risks, benefiting the ILS.
- Eurozone GDP growth is projected at 1.6%, while Israel's GDP is forecasted at 4.7%, indicating stronger growth for the shekel.
The near-term range for the EUR to ILS exchange rate is likely to remain within a stable band.
Upside risks include renewed strength in the euro due to positive economic indicators or European Central Bank actions. Conversely, a downside risk might arise if global oil prices remain low, potentially affecting euro strength due to its trade ties with commodity prices while the shekel retains its firmness from geopolitical stability.