GBP/ILS Outlook:
Slightly weaker, but likely to move sideways, as the rate is below its recent average and lacks a clear driver.
Key drivers:
• Rate gap: The Bank of England holds interest rates steady while the Bank of Israel recently cut rates, widening the gap between the two currencies.
• Risk/commodities: Oil prices have been stable recently, which tends to support the Israeli economy and the strength of the shekel.
• One macro factor: Mixed economic indicators from the UK, including rising inflation and steady retail sales, add uncertainty to the pound's direction.
Range:
The GBP/ILS is expected to hold steady within its recent range, given the lack of strong directional drivers.
What could change it:
• Upside risk: A surprise rate hike from the Bank of England could support the pound.
• Downside risk: Further rate cuts by the Bank of Israel could enhance the shekel's strength against the pound.
