EUR/ILS Outlook: Slightly positive, but likely to move sideways, as the rate is near its recent average and lacks a clear driver.
Key drivers:
• Rate gap: The European Central Bank is expected to maintain a neutral policy, while the Bank of Israel recently cut interest rates, which supports the shekel's strength against the euro.
• Risk/commodities: Oil prices are currently at 90-day highs, suggesting that higher energy costs could continue to exert pressure on the euro due to its economic implications.
• One macro factor: Recent projections from the Bank of Israel indicate robust GDP growth, which is another factor contributing to the shekel's strengthening trend.
Range: Movement for the EUR/ILS is likely to hold within its recent range, reflecting stability without significant momentum in either direction.
What could change it:
• Upside risk: A significant improvement in consumer confidence from Germany could boost the euro.
• Downside risk: Further interest rate cuts by the Bank of Israel could lead to additional shekel appreciation against the euro.
