Jerusalem, 3 February, 2026 (TPS-IL) — The Bank of Israel reported that in the fourth quarter of 2025, the Shekel strengthened by approximately 3.5% vis-à-vis the US Dollar and the Euro. In addition, the Shekel strengthened by a similar rate against the currencies of Israel’s main trading partners, in terms of the nominal effective exchange rate (i.e., the trade-weighted average shekel exchange rate against those currencies).

Worldwide, the trend of the US Dollar was mixed against most of the world’s major currencies. Among other things, the Dollar strengthened by about 6.2% against the Japanese yen, 0.2% against the Euro, and about 0.1% against the British pound, but weakened by about 1.4% against the Canadian Dollar.

The average actual standard deviation of changes in the shekel/dollar exchange rate, which represents its actual volatility, declined by 1.3 percentage points during the quarter, to an average level of 8.1%.

The average implied volatility in over-the-counter shekel/dollar options—those traded outside the stock exchange—which is an indication of expected exchange rate volatility, declined by 0.5 percentage points during the quarter, to an average level of about 8.8% at the end of the quarter.

This is alongside the average level of implied volatility in foreign exchange options in emerging markets, which declined by one percentage point compared to the previous quarter, to 8.6% at the end of the quarter. There was a similar decline in advanced economies, to 7% at the end of the quarter.

Gil Tanenbaum

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