Trading in options points to a lower shekel-dollar rate, with trades reflecting a 0.25% decrease to NIS 3.583/$.
Union Bank predicts that Bank of Israel will keep the interest rate unchanged at the next update, subject to developments in the Consumer Price Index (CPI).
The bank added that Wall Street will be flooded with macroeconomic figures this week, and that commodities prices will set the tone. It also notes that the shekel is going through a creeping depreciation against the dollar, but that the return of foreign currency traders from their summer vacations, and changes in the dollar-euro exchange rate will influence the shekel-dollar exchange rate. The bank predicts that the shekel-dollar exchange rate will be traded between NIS 3.54/$ and NIS 3.62/$ this week. The closest resistance level is NIS 3.594/$ and the support level is NIS 3.46/$.
Union Bank says, "The global crisis is far from over, and volatility will continue to play a role. We continue to recommend taking a cautious approach with stock investments, keeping up to 15% of investment portfolios in bonds."
The bank adds that commodities prices are generally headed downward, despite a recent up-tick. It says that a critical technically test is imminent, and that oil is again testing the $120 per barrel mark. Non-financial events are also at a critical moment, with uncertainty regarding Russia's intentions and the hurricane season in the Gulf of Mexico liable to upset the market.
Published by Globes [online], Israel business news - www.globes-online.com - on August 31, 2008
© Copyright of Globes Publisher Itonut (1983) Ltd. 2008