USD/ILS Outlook:
Bearish, as the rate is below its recent average and near recent lows.
Key drivers:
- Rate gap: The US Federal Reserve's decision to hold interest rates steady contrasts with the recent rate cut by the Bank of Israel, widening the gap in interest rate expectations.
- Risk/commodities: A decline in global oil prices is weighing on the US dollar, affecting its value against the shekel.
- One macro factor: Improved geopolitical sentiment is contributing to the shekel's strength, as seen in the recent stability in Israeli markets.
Range:
Expect USD/ILS to drift within its recent range, facing resistance to move higher.
What could change it:
- Upside risk: A stronger-than-expected US jobs report could boost the dollar, reversing recent declines.
- Downside risk: Continued sell-off in US assets may press the dollar lower and strengthen the shekel further.
