FX.co ★ Shekel Depreciates After Elections

The Israeli shekel weakened by more than 1% to 3.1 per USD on October 28, 2026, its lowest level since April, as investors reacted to the country’s legislative election results. Partial tallies, with more than 66% of ballots counted, showed Prime Minister Benjamin Netanyahu’s bloc on course to win 56 seats, while the bloc led by challenger Gadi Eisenkot was projected to secure 48 of the Knesset’s 120 seats. Arab-led parties, aligned with neither camp, were expected to take 16 seats. With no bloc close to the 61-seat threshold needed for a parliamentary majority, the outcome pointed to a potentially prolonged political deadlock, suggesting difficult coalition talks and heightening concerns over the formation and durability of the next government. At the same time, Israeli financial markets came under pressure, with the TA-125 benchmark index dropping nearly 3% and the yield on 10-year government bonds climbing above 4.1%.