The current market bias for the USD to ILS exchange rate is bearish.
Key drivers include:
- The Federal Reserve is expected to implement rate cuts in 2026, which may weaken the USD.
- Improved investor confidence surrounding geopolitical stability is strengthening the ILS.
- Israel's projected GDP growth of 4.7% in 2026 supports a stronger shekel.
The near-term trading range is likely to remain stable, with expectations for fluctuations around current levels.
Upside risks include any unexpected positive developments in U.S. economic data that could bolster the dollar's position. Conversely, downside risks may arise if geopolitical tensions in the region escalate, which could renew investor caution towards the shekel.
Currently, USD to ILS is trading at 3.1695, notably below its three-month average, indicating ongoing fluctuations in this market segment.