The Canadian dollar (CAD) has seen pressure recently, influenced primarily by fluctuations in oil prices which are crucial given Canada's status as a significant oil exporter. Recent forecasts indicate that declining oil prices have weighed on the loonie, leading to a trading range that has dipped to 14-day lows around 2.5333 ILS, marking a 2.4% decrease from its three-month average of 2.5956 ILS. This decline is notable in the context of the CAD trading within a 7.2% range over the past months, oscillating between 2.5300 and 2.7125 ILS.
Expectations regarding oil prices remain a central factor for the CAD's performance. Oil is currently trending at 90-day highs of 76.70 USD, a significant jump of 14.1% above its three-month average of 67.21 USD. Analysts suggest that while the recent uptick in oil prices could provide support for the CAD, the ongoing oil price volatility poses risks that could lead to further depreciation if prices soften again.
Political dynamics and trade relationships also play a critical role in the CAD outlook. The appointment of Mark Carney as Prime Minister following Justin Trudeau's resignation amidst political instability may create short-term uncertainty. Additionally, ongoing trade tensions with the U.S., particularly potential tariffs, have loomed over future CAD projections, with analysts indicating that these factors may limit the upside potential of the currency in the near term.
Conversely, the Israeli shekel (ILS) is experiencing significant challenges. The recent conflict escalation in the Middle East has contributed to a steep decline in the ILS, which recently fell to its lowest point in almost eight years against the U.S. dollar. In response, the Bank of Israel's intervention through foreign exchange sales shows the severity of the situation. The sharp depreciation of the ILS, influenced by tariffs and ongoing geopolitical unrest, adds another layer of complexity for the CAD/ILS exchange rate.
In summary, while oil price trends may provide temporary relief for the CAD, broader geopolitical tensions, trade disputes, and domestic economic policies will significantly impact the exchange rate against the ILS. It remains crucial for businesses and individuals engaging in international transactions involving these currencies to stay informed of ongoing market developments and forecasts.