The EUR to ILS exchange rate has shown relative stability over recent weeks, currently positioned at 3.7832—1.3% below its three-month average of 3.8335. The euro's strength against the shekel fluctuates considerably, having traded within a 6.8% range from 3.7091 to 3.9603. Analysts indicate that the euro's recent resilience has largely stemmed from a weakened US dollar, reflecting its negative correlation with the USD amid shifting investor sentiments.
Key factors influencing the euro include the European Central Bank's (ECB) dovish policy shift and recent economic indicators. Although the ECB raised interest rates to combat inflation, the current expectations are leaning towards potential rate cuts by 2025 due to concerns over slowing growth. This anticipated reduction may narrow the interest rate differential with the US Federal Reserve, potentially exerting downward pressure on the euro's value against the shekel.
On the Israeli side, the shekel has recently appreciated, supported by a decline in the annual inflation rate, which fell to 2.5% in September, signaling a potential for future interest rate cuts by the Bank of Israel. This positive economic outlook has bolstered investor confidence in the shekel, helping it gain approximately 9.3% against the dollar in the second quarter, and contributing to the reduction of the risk premium following a recent ceasefire in Gaza.
Additionally, global oil prices, currently sitting at $62.45—3.6% below their three-month average—are also critical as they can impact both the euro and shekel indirectly through the broader economic performance of their respective regions. Analysts note that fluctuations in oil prices can shift market sentiments and influence currency movements across the board.
In summary, the EUR to ILS exchange rate outlook will be shaped by ECB monetary policy developments, further inflation data from Israel, and the evolving geopolitical landscape. The combined effects of these elements underscore the importance of monitoring both local and global economic indicators to make informed decisions regarding international transactions involving these currencies.
