EUR/ILS Outlook: Slightly weaker, but likely to move sideways, as the rate is just below its recent average and lacks a clear driver for change.
Key drivers:
• Rate gap: The European Central Bank maintains a neutral monetary policy while the Bank of Israel recently lowered its interest rate, supporting a stronger shekel against the euro.
• Risk/commodities: With oil prices elevated and above average, concerns about inflation in the Eurozone may pressure the euro, impacting its strength against the ILS.
• One macro factor: New data on consumer confidence from Germany could influence the euro’s appeal; improved sentiment may spur a stronger euro.
Range: Expect the EUR/ILS to drift within its recent stable range, without testing either extreme soon.
What could change it:
• Upside risk: Any significant improvement in German consumer confidence could boost the euro.
• Downside risk: Continued strength in the shekel or further interest rate cuts by the Bank of Israel might weaken the euro's position.
