The exchange rate between the Canadian dollar (CAD) and the Israeli new shekel (ILS) has recently been influenced by a combination of domestic economic factors and international developments. Currently, the CAD is trading at 90-day lows around 2.3149, approximately 3.8% below its three-month average of 2.4051. The loonie's depreciation can be attributed to falling oil prices, with crude trading at $65.07, which is 1.7% below its three-month average, amidst concerns of global oversupply and ongoing tensions in U.S.-China trade relations.
Analysts point out that the CAD is particularly sensitive to movements in oil prices, given Canada’s status as a major oil exporter. As oil prices decline, expectations for lower economic growth in Canada also rise. Recent GDP figures suggest that the Canadian economy slipped into contraction in September, heightening concerns about the loonie's future performance.
The Bank of Canada’s reduction of its key interest rate to 2.5% has added to the downward pressure on the CAD. As interest rates decline, investors may seek better yields elsewhere, resulting in further CAD weakness. The recent commentary from Federal Reserve Chair Jerome Powell regarding potential rate cuts in the U.S. has provided some stabilization for the CAD against the U.S. dollar, but this has not translated into significant strength against the ILS.
On the other hand, the Israeli shekel has demonstrated relative strength, appreciating approximately 9.3% against the U.S. dollar in the second quarter of 2025. This trend is supported by a decline in Israel's inflation rate, which fell to 2.5% in September, falling within the government's target range and raising the possibility of interest rate cuts by the Bank of Israel. Additionally, reduced geopolitical tensions have improved investor sentiment towards Israel, bolstering the shekel’s position.
In summary, with the CAD facing pressure from lower oil prices and interest rates combined with a weakening economic outlook, and the ILS benefiting from a stable inflation rate and easing geopolitical risks, the exchange rate of CAD to ILS is anticipated to remain volatile. For individuals and businesses engaging in international transactions, monitoring these developments will be crucial for making timely financial decisions.
