The USD to ILS exchange rate is currently bearish.
The Federal Reserve's anticipated rate cuts could weaken the USD, as inflation is trending down, fostering expectations for monetary easing. The strengthening of the ILS is also driven by improved investor sentiment following geopolitical developments in Israel, leading to lower risk premiums. Additionally, the projected 4.7% GDP growth for Israel in 2026 supports the shekel's ascent against the dollar.
In the near term, USD/ILS may remain range-bound, with rates expected around current lows. Recent data shows the USD/ILS near 3.1771, notably below its three-month average.
An upside risk could emerge if there are unexpected improvements in US economic data, while a downside risk includes further geopolitical stability that could bolster the ILS beyond current projections.

