GBP to ILS Outlook
In the near term, GBP/ILS is trading close to recent lows, supported by risk-off flows and geopolitical tensions. The pair remains within a 3-month range and holding near its recent lows. Current conditions suggest that the pair could face further pressure if risk sentiment remains dominant and safe-haven demand persists.
Transfer implications
- Expats: sending money abroad from GBP to ILS may find current levels less favourable than recent ones.
- Travellers: exchanging GBP for ILS could see lower value if the pair declines further.
- Businesses: paying Israeli ILS invoices in GBP might face less favourable exchange rates in the near term.
Key drivers
- Rate gap: The Bank of Israel's rate cuts have narrowed the yield advantage of ILS, supporting safe-haven flows.
- Risk/commodities: Elevated geopolitical risks boost demand for ILS as a safe haven.
- Global factors: Global risk sentiment remains pressured by geopolitical tensions, influencing currency flows.
What could change it
- Upside risk: An easing of geopolitical tensions or risks could support GBP against ILS.
- Downside risk: Further deterioration in risk sentiment or safe-haven flows could deepen the pair’s decline.