GBP/ILS Outlook: Slightly positive, but likely to move sideways as the rate is near its 90-day average and lacks a clear driver.
Key drivers:
• Rate gap: The Bank of England maintains a cautious stance on rate cuts, while the Bank of Israel has recently reduced its interest rate, leading to a more favorable outlook for the shekel.
• Risk/commodities: The current uncertainty around US tariffs may negatively impact the pound, causing hesitation among investors.
• One macro factor: The UK faces projected sluggish GDP growth, which may further weigh on sterling as household incomes stagnate.
Range: Expect GBP/ILS to move within its recent trading range, possibly holding steady around the current level.
What could change it:
• Upside risk: A surprising improvement in UK economic data could boost GBP demand.
• Downside risk: Increased geopolitical tensions or worsening trade dynamics could strengthen the shekel and pressure GBP/ILS lower.