The shekel is depreciating against the dollar and euro in options trading this morning, reversing Friday's strong appreciation, when the shekel-dollar rate fell to a level last seen in June 1998. The shekel-dollar exchange rate rose 0.53% to NIS 3.827/$ and the shekel-euro exchange rate rose 0.74% to NIS 5.642/€.
On Friday, the shekel-dollar representative exchange rate was set at NIS 3.807/$, after falling 0.8%. The shekel-euro representative exchange rate was set at NIS 5.60/€, after falling 1.1%.
Bank Hapoalim notes in its weekly market report that the shekel appreciated on thin trading volumes during last week's short trading week because of New Year's, which resulted in volatility in exchange rates. The Israeli foreign currency market is now waiting for developments in the dollar on international markets when they open tomorrow. The US Federal Reserve Board will play a key role in trading, in view of assessments of further interest rate cuts. Meanwhile, the market predicts that the Bank of Israel will continue to raise the local interest rate, and the resulting favorable interest rate gap in favor of Israel is expected to help support the shekel.
Trading in the dollar on the Israeli foreign currency market will also be affected in the near term by both developments in the dollar against leading currencies and by international stock markets. Factors supporting the shekel's appreciation are also still active, since foreign investors are expected to continue investing in Israel on assessments of strong Israeli economic performance, whereas fears that the US will slide into recession are growing.
Published by Globes [online], Israel business news - www.globes-online.com - on January 6, 2008
© Copyright of Globes Publisher Itonut (1983) Ltd. 2008