I put $2000 US into a PayPal account of mine, and Paypal is listing that as being worth 6653.79 Israel New Shekels (ILS). That’s an exchange rate of 1 USD for 3.32689 ILS. (6653.79 / 2000 = 3.32689)
According to XE.com, the exchange rate between the two currencies is 3.42120. That’s a full tenth of a percentage point! I realize they need some space to protect themselves from sharp fluctuations, but this seems to be more in the nature of profiting on the exchange and taking money from you in addition to what Paypal’s fees are.
If you’re interested, I once interviewed various search marketers on how they handle currency fluctuations.