The Israeli Shekel Projected to Strengthen Against the US Dollar
UBS Forecasts Shekel Appreciation
UBS has predicted a rise in the value of the Israeli shekel compared to the US dollar, citing a decrease in geopolitical risks. The recent tensions between Iran, Israel, and conflicts with Hamas caused the shekel to briefly surpass the 3.80 level against the dollar. However, UBS analysts anticipate these pressures to ease, allowing the shekel to take advantage of Israel’s economic recovery and the prudent policies of the Bank of Israel (BoI).
Support from Federal Reserve
UBS believes that the Federal Reserve’s easing cycle will further support the shekel’s performance. As geopolitical risks diminish, the financial institution predicts a strengthening shekel with end-of-quarter exchange rate forecasts.
Projected Appreciation of the Shekel
UBS’s projections show a gradual strengthening of the shekel, reaching 3.60 by the end of the next quarter and stabilizing at 3.45 through the first quarter of 2025. These forecasts are based on the resilience of Israel’s economy and confidence in the country’s economic management.
Optimistic Outlook for the Shekel
The outlook for the shekel hinges on the assumption that the risk premium, elevated by recent confrontations, will diminish over time. UBS’s analysis points to a promising future for the Israeli shekel, supported by a robust economic recovery and favorable monetary conditions.
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