Forecasts for USD to ILS
Recent forecasts for the USD to ILS exchange rate highlight a confluence of domestic and international factors contributing to increased volatility and upward pressures on the US dollar. FX analysts indicate that the resilience of the US economy, despite signs of inflation cooling, has resulted in a more cautious approach from investors. The recent Federal Open Market Committee (FOMC) meeting minutes signaled that most policymakers do not foresee further aggressive rate cuts in the near term, providing a bullish outlook for the dollar. Economists expect that upcoming consumer price index (CPI) data could reaffirm inflationary trends and impact Fed policy, potentially shaping the dollar's strength against other currencies, including the Israeli shekel.
On the other hand, the Israeli shekel has faced significant devaluation, reaching its lowest value in nearly eight years against the dollar, primarily driven by the escalation of conflict in the Middle East. This geopolitical uncertainty has compelled the Bank of Israel to implement foreign exchange interventions to stabilize the currency. The shekel’s recent decline, where USD/ILS traded at 3.7669—1.4% above its three-month average—illustrates the market’s reaction to the ongoing tensions. Despite these pressures, market views suggest that the shekel could regain some ground if the geopolitical situation stabilizes, but analysts emphasize that continued volatility is likely unless there are significant diplomatic developments or changes in monetary policy direction.
