Recent forecasts and market updates indicate a complex outlook for the EUR to ILS exchange rate, driven by macroeconomic indicators and geopolitical developments. The euro (EUR) has recently faced downward pressure amid weak consumer confidence within the Eurozone and ongoing tensions with China. The consumer confidence index held steady at -14.2 in November, which contrasts with expectations for a slight improvement, suggesting underlying concerns about economic stability in the region.
Moreover, the European Central Bank (ECB) is shifting towards a dovish monetary policy stance after having raised interest rates to combat inflation. This change may lead to rate cuts by late 2025, narrowing the interest rate differential with the U.S. Federal Reserve. Such factors could weigh on the euro's strength moving forward.
Conversely, the Israeli new shekel (ILS) has shown signs of resilience. A reduction in Israel's inflation rate to 2.5% in September has strengthened expectations for potential interest rate cuts by the Bank of Israel, further supporting the shekel's position. Following a ceasefire in Gaza, the ILS has benefited from a decrease in the risk premium associated with geopolitical tensions, resulting in a notable appreciation against the U.S. dollar. Analysts noted that the shekel strengthened by about 9.3% in the second quarter of 2025, spurred by improved investor sentiment.
The current exchange rate stands at 3.7864 ILS per EUR, which is 1.7% lower than the three-month average of 3.8501, indicating a relatively stable trading range. The euro has fluctuated between 3.7091 and 3.9603 during this period, suggesting some volatility but overall stability amid shifting market conditions.
Additionally, oil prices could play a role in influencing the euro's trajectory. Current oil prices at $62.56 are 4.4% below their three-month average, indicating a volatile trend that may impact economic conditions in the Eurozone, particularly given its reliance on energy imports. Should oil prices recover or stabilize, it might provide some support for the euro in the future.
In summary, while factors such as ECB policy shifts and geopolitical dynamics pose risks to the euro, the ILS is bolstered by declining inflation and reduced geopolitical risk profiles. This situation creates a nuanced environment for the EUR to ILS exchange rate, and stakeholders should remain vigilant in monitoring these developments for potential impacts on international transactions.
