The shekel-dollar and shekel-euro rates continued to rise today, bouncing off multi-year lows at the close of last week, with the shekel-euro rate stopping just short of NIS 5/€.
Mizrahi Tefahot Bank (TASE:MZTF) head of strategy and investments Ronen Menahem writes, "On the basis of a rough estimate, if we take into account foreign trading, and the differences in inflation between the US and Israel, the exchange rate should be NIS 3.80/$. In fact, this calculation has not changed much since March 2007. On the other hand, if we take into account short capital flows, and the difference in interest rates between the two countries, the rate should be NIS 3.40/$. This calculation has remained constant since as far back as early 2005. We therefore believe that the shekel-dollar rate should range from NIS 3.40-3.80/$."
The shekel-dollar rate is currently up 0.26% at NIS 3.269/$, and the shekel-euro rate is up 0.7% at NIS 5.097/€.
The shekel-dollar representative rate yesterday was set 0.83% higher at NIS 3.26/$, and the shekel-euro representative rate was set 1.16% higher at NIS 5.0629/€.
Published by Globes [online], Israel business news - www.globes-online.com - on June 3, 2008
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