The EUR to ILS exchange rate has recently been influenced by a blend of economic developments in Europe and Israel. The euro has faced pressure following the downgrade of France's credit rating by Fitch, leading to a slight decline in its value. Despite this, the euro's losses have been somewhat moderated due to its inverse correlation with the US dollar. Analysts suggest that if upcoming reports from Germany's ZEW economic sentiment index indicate further deterioration, the euro could experience more significant declines.
On the positive side, the eurozone's expansion, with Bulgaria set to join the eurozone in 2026, and favorable monetary policy signals from the European Central Bank (ECB) contribute to a growing sentiment for the euro. A recent report from ING highlights early signs of increased foreign investment in euro-denominated assets, suggesting a strengthening global status for the euro, which has appreciated notably against the USD this year.
Conversely, the Israeli New Shekel (ILS) has shown remarkable strength, recently appreciating against the US dollar. The ILS is currently at its strongest level since late 2022, driven by robust economic fundamentals and a reduction in geopolitical risk. UBS has revised its forecasts, projecting the USD/ILS exchange rate to reach 3.30 by the end of the current quarter, stabilizing expectations for the shekel.
Recent price data indicates that EUR to ILS is trading at 7-day highs near 3.9419, closely aligned with its three-month average. This stability is evident in the relatively narrow trading range of 4.7%, from 3.8525 to 4.0329. However, the volatility in the oil markets, with OIL to USD trading at 67.44—1.9% below its three-month average—suggests potential impacts on both currencies, as fluctuating oil prices can ripple through the eurozone economies, given their dependence on energy imports.
Overall, the outlook for the EUR to ILS exchange rate appears influenced heavily by geopolitical developments, monetary policies, and changes in investor sentiment surrounding both currencies. As the situation evolves, investors and businesses engaged in international transactions should remain vigilant regarding these dynamics.
