The current market bias for the EUR to ILS exchange rate is bearish. Key drivers include the interest rate differential, with the European Central Bank maintaining rates while the Bank of Israel projects robust GDP growth for 2026. Additionally, a strengthening Israeli shekel reflects improved investor confidence due to geopolitical developments.
Economic growth prospects in the Eurozone could provide some support, but overall sentiment is dampened by concerns over the ECB's caution regarding euro strength affecting inflation. The expected trading range for EUR to ILS will likely remain stable but could show some fluctuations.
Upside risks include any unexpected macroeconomic data indicating stronger growth in the Eurozone, which might prompt a more favorable view of the euro. Conversely, a sudden escalation in geopolitical tensions in the region could lead to further weakness for the euro.