Forecasts for USD to ILS
Recent forecasts for the USD to ILS exchange rate indicate significant volatility influenced by both geopolitical events and economic factors. The U.S. dollar has faced selling pressure due to heightened tensions in trade relations between the U.S. and China, where new tariffs have raised recession fears among investors. Analysts suggest that this trade conflict may lead to continued US dollar depreciation as confidence wanes. While a cooler inflation report could pave the way for a Federal Reserve interest rate cut—which would generally weaken the dollar—such a move might also bolster sentiment about economic stability, potentially offsetting some of the downside risks.
Furthermore, recent data shows the USD/ILS exchange rate is trading at 7-day lows near 3.7184, which is 2.4% above its three-month average of 3.6302. This indicates a relatively stable range of fluctuations from 3.5344 to 3.8188, which suggests that the USD has been able to hold onto some strength against the Israeli shekel despite broader economic concerns.
The Israeli shekel has been under pressure, recently plummeting to its lowest value against the dollar in nearly eight years, primarily driven by the ongoing conflict in the region. The Bank of Israel's intervention through foreign exchange sales aims to stabilize the currency amid escalating tensions and trade impacts, including the 17% reciprocal tariff imposed by the U.S. on Israeli goods. Forecasters highlight that geopolitical instability will continue to weigh on the shekel, limiting its ability to appreciate against the dollar in the near term.
Overall, while there are factors that may support the shekel if stability returns, the prevailing sentiment remains cautious as uncertainty surrounding U.S. trade policy and regional conflict continues to shape market expectations. Investors should monitor upcoming economic data closely, as shifts in inflation and Federal Reserve policy could significantly affect both the USD and ILS in the months ahead.
