The current market bias for the EUR to ILS exchange rate is bearish.
The main drivers affecting this outlook include:
- The European Central Bank’s (ECB) cautious stance on interest rates, as they prioritize inflation control amid economic growth forecasts, which could weigh on the euro.
- The Israeli New Shekel's recent strength, bolstered by improved investor sentiment and positive economic indicators, including a predicted GDP growth of 4.7% for 2026.
- Geopolitical stability following a ceasefire in Gaza, which has reduced risk premiums and supported the shekel's performance.
In the near term, the EUR to ILS exchange rate is expected to remain within a stable range. Upside risks could arise from unexpected improvements in eurozone economic data or policy shifts by the ECB that favor the euro. Conversely, downside risks may stem from escalating geopolitical tensions or a significant decline in oil prices, as they typically influence the euro's value.