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Shekel Tad Firmer Amid Lower Liquidity, Coalition Mulls Action On Judicial Overhaul

ILS

USD/ILS has edged lower as concerns over Israel's judicial overhaul have seemingly been shelved for now, with the 200-DMA (ILS3.5467) supporting price action. The absence of local participants (Israel has already started the weekend) might be playing into this dynamic, with little coverage of local developments seen on major international news wires. When this is being typed, USD/ILS trades -65 pips at ILS3.5548, a break of the 200-DMA would expose Mar 28 low of ILS3.5287.

  • A notable downside surprise in Israel's May CPI (+4.6% Y/Y vs. +5.0% expected) inspired some very limited recovery in USD/ILS yesterday, preventing the pair from piercing its 200-DMA. The rate has continued to oscillate around yesterday's worst levels today.
  • It is worth keeping a finger on the pulse re: judicial overhaul amid reports in local media that the coalition is preparing to go on the offensive. Ynet reports that they believe that the odds of a deal with the opposition are slimmer than before. The coalition is therefore preparing for a scenario, whereby it would unilaterally push its judicial reforms through the Knesset.

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