The market bias for the EUR to ILS exchange rate is currently bearish.
Key drivers include:
- An interest rate reduction by the Bank of Israel, which has strengthened the shekel against the euro.
- Recent poor economic data from Germany showing a decline in exports and slowing retail sales, contributing to negative euro sentiment.
- Eurozone inflation trends suggesting moderation, which might affect the ECB's approach to interest rates in the near term.
In the coming months, the expected trading range is likely to remain stable but could see fluctuations as it reflects recent lows.
Upside risks to the euro could stem from potential positive macroeconomic developments or restoration of investor confidence, particularly if geopolitical tensions ease. Conversely, persistent weak economic data from the Eurozone or a significant rally in oil prices could further weigh down the euro against the shekel.