ILS: Shekel Firms Despite Geopolitical Tensions, Yesterday's Rating Downgrade

USD/ILS has now erased the bulk of yesterday's gain and trades at 3.7490, around 385 pips lower on the session, as we type. Bears look for further losses past the 100-DMA, which intersects at 3.7201. Bulls see Aug 6 high of 3.8533 as their initial target.

• There is continued uncertainty around the timing of Iran's widely anticipated retaliation strike against Israel, albeit there is a growing chorus of voices suggesting that it might happen this week. Earlier today, the Iranian Foreign Ministry issued a statement denouncing Western calls for Tehran to stand down.
• Fitch last night downgraded Israel's sovereign credit rating to A from A+, with a negative outlook, pointing to the risks posed by the war in Gaza and heightened geopolitical tensions on several fronts. According to Fitch, Israel's fiscal deficits may deepen if the war continues into next year.
• Data showed that Israel's trade deficit widened to $2.841bn in July from the revised $2.595bn in June.