Bias: Bearish-to-range-bound, as USD/ILS sits below its 90-day average and in the lower half of the 3-month range.
Key drivers:
Rate gap: Markets expect the US Fed to trim policy toward neutral this year while the Bank of Israel has already cut, narrowing the gap and supporting the shekel.
Macro factor: US labor market data and signals of Fed easing are likely to influence dollar direction.
Risk appetite: global risk trends and Israel’s improving growth outlook influence flows, with stronger risk appetite typically helping the shekel.
Range: Range: Likely drift within the lower half of the range, with little momentum to push into the upper zone.
What could change it:
Upside risk: stronger US payrolls and a firmer Fed stance could lift the dollar, pushing USD/ILS higher.
Downside risk: a larger-than-expected Bank of Israel rate cut or a notable upgrade to Israel’s growth outlook could push USD/ILS lower.
