The exchange rate forecast for the EUR to ILS indicates a complex interplay of factors influencing both currencies. As of recent analysis, the euro (EUR) has shown some resilience, benefiting from a softer USD which has complemented its upward movement. However, the latest industrial production figures from the Eurozone disappointed expectations, casting a shadow over sustained gains. Additionally, with the European Central Bank (ECB) adopting a dovish stance following its interest rate hike to 4.0%, expectations are that rates will decrease to 3.5% by late 2025. This shift could narrow the interest rate differential with the US Federal Reserve, potentially impacting the euro’s attractiveness to investors.
Moreover, the euro has appreciated almost 14% against the USD from January to mid-September 2025, reflecting growing investor confidence in the Eurozone’s economic recovery. Global financial conditions are vital, as any normalization could lead to an equilibrium exchange rate near 1.20 USD per euro, while subdued conditions might maintain it closer to 1.10. The ongoing geopolitical tensions related to the conflict in Ukraine further complicate the euro's outlook, with potential volatility should the situation escalate.
Turning to the Israeli new shekel (ILS), recent developments are promising. Israel's inflation rate has dropped to 2.5%, the lowest in several months, which could prompt the Bank of Israel to consider interest rate cuts. The shekel has appreciated by approximately 9.3% against the USD, and with improved investor sentiment and a reduction in geopolitical risk following the ceasefire in Gaza, analysts suggest the shekel could strengthen further.
The current EUR to ILS exchange rate stands at 3.7542, which is 2.8% below its three-month average of 3.8635, indicating a relatively stable trading range of 3.7091 to 3.9777. Significant fluctuations in oil prices also influence these currencies; for instance, recent oil prices are at 64.29 USD, slightly below their three-month average of 65.67, amid ongoing volatility. This could have downstream effects on both inflation and economic performance in the Eurozone and Israel.
Overall, while the euro faces challenges from its internal economic conditions and geopolitical risks, the ILS shows signs of strength that might support a favorable exchange rate against the euro in the near term. The interplay of these factors will be crucial for businesses and individuals engaging in international transactions.
