USD/ILS to 3.099 by October 21: the July rate-path gap

USD/ILS reaches 3.099 by October 21, 2026 in the base case, 3.143 in the bull case and 3.011 in the bear case. The base case is one standard deviation on Bank of Israel USD/ILS volatility, because the July staff path still averages the policy rate at 3.0 percent in the second quarter of 2027, 25 basis points under 3.25 percent.

The representative rate on October 9, 2026 was 3.055, up from 3.012 on September 1, when the Monetary Committee cut by 25 basis points. The euro rate (EUR/ILS) fell from 3.4922 to 3.4291 over those dates, so the dollar did most of the work. Below, 3.099 is derived from that volatility and set against the July path, with four prints that end the call.

Key Levels:

• USD/ILS: 3.055 — Bank of Israel representative rate, October 9, 2026
• Base case target: 3.099 by October 21, 2026 — one standard deviation; actual volatility 8.0807 percent on October 8
• Bull case target: 3.143 — two standard deviations, if the October 21 forecast takes the second-quarter 2027 average below 3.0 percent
• Bear case target: 3.011 — one standard deviation lower, on a hold at 3.25 percent
• Major support: 3.005 — September 4, 2026 post-cut low
• Major resistance: 3.084 — October 8, 2026 post-cut high
• Invalidation level: representative rate at or below 3.005 before October 21

Where the 3.099 figure comes from

The spot is the Bank of Israel representative rate: bank quotes over several hours, not a 24-hour dealing price, read on October 10, 2026. The last print is October 9, because there is no Saturday rate. Volatility is the actual-volatility series, 8.0807 percent on October 8. The English monetary-policy page still leads with the September 1 cut to 3.25 percent. The dollar leg is Federal Reserve H.15, released October 9, 2026.

Related:NZD/CAD to 0.7923 by December 9: the 2-year yield case

Eight weekday sessions, October 12 through October 21, on a 252-session year, scale the band. Sundays are left out. Implied volatility was 10.18 percent on September 30 and would widen it. The scaling is not a forecast.

The post-cut tape is a dollar move

Since September 1, USD/ILS has sat between 3.005 and 3.084. October 9 is 1.43 percent above 3.012. The euro rate is 1.81 percent lower and the effective index rose 0.32 percent. Versus 3.19 on December 31, 2025, the dollar rate is 4.23 percent lower.

Sources: Bank of Israel exchange-rate dataflow, retrieved October 10, 2026. The index is shekels per basket, January 1, 2015 = 100, rounded to two decimals. Time window: July 6 to October 9, 2026.

USD/ILS is the shekel price of one US dollar, and the base case here is 3.099 by October 21, 2026. The Bank of Israel representative rate for October 9, 2026 is 3.055. Actual volatility on the Bank's USD/ILS series was 8.08 percent on October 8, 8.0807 percent unrounded. Over eight weekday sessions from October 12 through October 21, on a 252-session year, that is a one-standard-deviation move of 1.44 percent, which takes 3.055 to 3.099. The level sits just above the October 8 high of 3.084. Direction comes from the July 6, 2026 staff forecast, which still averages the policy rate at 3.0 percent in the second quarter of 2027, 25 basis points under the 3.25 percent rate set on September 1. The call ends at a representative rate of 3.005 or lower, the September 4 low.

The rate is 3.25 percent, 100 basis points under the 4.25 percent rate of November 24, 2025, after 2026 cuts to 4 percent, 3.75 percent, 3.5 percent and 3.25 percent. H.15 put the effective federal funds rate at 3.88 percent on October 8, a gap of 63 basis points. End-September reserves fell $4,643 million to $236,998 million, mostly revaluation.

"A further decline in inflation expectations towards the lower end of the target range may require a more neutral policy stance."

— Marnix van Rij, Alternate Executive Director for Israel, with Nadav Steinberg, Senior Advisor to the Executive Director, statement of June 24, 2026 (International Monetary Fund Country Report No. 26/161)

The July path is still 25 basis points under the rate

The July path gap is the space between the Bank of Israel's 3.25 percent rate and the 3.0 percent average the Research Department projected for the second quarter of 2027. The Research Department published it on July 6, 2026 and said the projection reflected two additional interest-rate reductions in the coming year. The Committee then cut to 3.50 percent on July 6 and to 3.25 percent on September 1, 25 basis points each time, the second by four votes to one. An average of 3.0 percent is still 25 basis points below the rate in force. That does not put the remaining quarter-point on October 21. It means the last published path has not reached its own average. The new forecast is published that day at 16:00, with the decision and a press conference, on the Bank's 2026 calendar.

"The Bank of Israel interest rate is expected to average 3.0 percent in the second quarter of 2027 (Table 2). This forecast reflects two additional interest rate reductions in the coming year."

— Research Department staff forecast, Bank of Israel, July 6, 2026 (Bank of Israel)

On July 3, forecasters and Shekel Interest Rate quotes put the rate at 3.0 percent one year ahead. IMF staff put the nominal neutral band at 2.5 to 3.5 percent. July inflation was 1.5 percent, below the midpoint of the 1–3 percent target, in the September 1 decision.

July's forecast assumed Brent near $72 a barrel. The September decision had it up about 25 percent, to around $90. The September 15 minutes record one unnamed member voting to hold at 3.5 percent. That caution is the bear case. The dollar half sits in the desk's USD/CHF note and its US ten-year note.

What an eight-session band leaves out

There is no October rate path yet, so July's 3.0 percent is not today's curve. A straight line from 2.813 on June 1 would pass 3.143 early. The post-cut range has not. Elections are due by late October 2026.

"Further rate cuts toward the neutral rate would be appropriate if inflation pressures moderate or disinflationary forces—such as oil price stabilization or sustained exchange rate appreciation—become more pronounced."

— Kotaro Ishi, mission chief, IMF European Department, in the Article IV staff report he led, completed June 10, 2026 (IMF)

What would invalidate this call

The base case of 3.099 breaks if any one of these four observations prints.

• A representative USD/ILS rate at or below 3.005. That September 4 low is the invalidation.
• The October 21 forecast puts the second-quarter 2027 average at 3.25 percent or higher. The published path would no longer sit under today's rate.
• The effective federal funds rate in H.15 prints at 3.25 percent or lower before October 21. The gap of 63 basis points is the dollar leg.
• The Committee lifts the policy rate above 3.25 percent on October 21. A hike contradicts the July path. A hold does not.

What to watch into the October 21 decision

October 21 at 16:00 brings the rate, a Research Department forecast and a press conference. September 1 had no forecast, and November 23, 2026 has none either. The row lists a maintenance-period start on October 22 and a start date of October 25. The new rate and the new second-quarter 2027 average decide the call.

On the tape, 3.084 and 3.005 are the bounds. Through 3.084, 3.143 is the live question. Under 3.012, the bear case is early. The same window is in the NZD/USD note into October 28 and the USD/SEK note into November 4.

TL;DR

USD/ILS reaches 3.099 by October 21, 2026 in the base case, 3.143 if the new forecast takes the second-quarter 2027 rate average below 3.0 percent, and 3.011 if the Committee holds. The October 9 representative rate was 3.055. Bank of Israel volatility of 8.08 percent on October 8 scales to a 1.44 percent move over eight weekday sessions, which is 3.099. The July path still averages the policy rate at 3.0 percent in the second quarter of 2027, against 3.25 percent today. A print at or below 3.005 invalidates the call.

FAQ

What is the base-case USD/ILS level?

The base case is 3.099 by October 21, 2026. Spot is the October 9 representative rate of 3.055. Actual volatility of 8.0807 percent on October 8, over eight weekday sessions and a 252-session year, is a 1.44 percent move. One standard deviation above 3.055 is 3.099. It is a band around the last print, not a promised fixing.

What is the Bank of Israel rate now?

It is 3.25 percent, after a 25 basis point cut on September 1, 2026 from 3.5 percent, by four votes to one. The English monetary-policy page still leads with that decision. Nothing on the calendar sits between September 1 and October 21. The following announcement is November 23, with no staff forecast on that row.

Must the Bank cut on October 21?

No. The July 6 forecast averaged the rate at 3.0 percent in the second quarter of 2027. Cuts since then took the rate to 3.50 percent and then 3.25 percent. The remaining 25 basis points are not dated to one meeting. October 21 matters because the next forecast is published then, at 16:00.

Why is this a dollar move more than a shekel move?

From September 1 to October 9 the dollar rate rose from 3.012 to 3.055 and the euro rate fell from 3.4922 to 3.4291. The effective index rose only from 62.26 to 62.46. The funds rate was 3.88 percent on October 8, 63 basis points over the Bank of Israel rate of 3.25 percent.

What single print kills the call?

A representative rate at or below 3.005, the September 4 low, kills it. That is the invalidation in the key-levels box. The bear case of 3.011 can still happen if the Committee holds and the rate drifts towards the September 1 print of 3.012. Through 3.005, the post-cut range has failed on the downside.

This article is informational analysis only and is not financial, investment, or trading advice. Foreign-exchange, commodity, and equity markets are highly volatile and can lose substantial value rapidly. Leveraged products carry total-loss risk and may exceed the initial margin posted. Past performance and historical correlations do not guarantee future results. Do your own research and consult a regulated financial adviser before making any investment decision.