Israel’s shekel could strengthen 2% to 3% if the opposition wins the Oct. 27 election, according to a JPMorgan report, while another win for Prime Minister Benjamin Netanyahu could trigger a 3% decline. JPMorgan assigned a 55% probability to an opposition victory led by former military chief Gadi Eisenkot, although it said the electoral arithmetic remains complex and polls have often underestimated Netanyahu’s Likud party. A broad coalition followed by prolonged political uncertainty could leave the currency broadly steady. The election is unlikely to produce major fiscal or economic policy shifts, but its outcome could affect Israel’s relations with Western allies and international investors’ views of judicial system reforms and policies in the West Bank and Gaza. JPMorgan noted that the shekel weakened nearly 10% against the dollar between early 2023, when strongly contested judicial reforms were proposed, and the Oct. 7 Hamas attack. It said the risk-reward balance was broadly even, citing Israel’s strong technology sector, a favorable external backdrop and potential resistance from the Bank of Israel to excessive currency strength. Current implied volatility (the market’s expected size of future price moves) suggests only about a 1% move around the election, which JPMorgan analysts said seems low.