The USD to ILS exchange rate has seen notable fluctuations recently, driven by a mixture of geopolitical tensions and economic indicators impacting both currencies. Currently, the USD is priced at 3.3534 ILS, which is 3.6% below its three-month average of 3.4787 ILS. This volatility reflects a range between 3.3170 and 3.6424 ILS, primarily influenced by the ongoing conflict in the Middle East and changing market sentiment.
Analysts have pointed out that the US dollar has been weakened by a risk-positive sentiment, reducing its appeal as a safe-haven currency. Recent economic data, including a stronger-than-expected S&P services PMI, has not been enough to propel the dollar upward, especially with predictions of a significant 10.8% decline in US durable goods orders, which could weigh further on the currency's strength.
The dollar's dynamics are primarily driven by monetary policies from the Federal Reserve, which traditionally boosts demand when interest rates increase. On the other hand, ongoing global uncertainties, such as the war in Ukraine and rising geopolitical tensions, tend to strengthen the USD as investors seek security in U.S. Treasury bonds.
In contrast, the Israeli shekel has faced immense pressure, recently dropping to its lowest level against the dollar in almost eight years due to the escalation of conflict following a major cross-border attack by Hamas militants. The Bank of Israel's response, including unprecedented foreign exchange sales, was aimed at stabilizing the shekel during these turbulent times.
Forecasters indicate that as the geopolitical landscape evolves, particularly in the Israeli-Palestinian conflict, there may be continued pressure on the ILS, which juxtaposes the relatively stable but sensitive nature of the USD. Investors should stay alert to ongoing developments in both regional and global economic contexts, as they will significantly influence future trends in the USD to ILS exchange rate.
