Merrill Lynch sees shekel at 3.4/$ by mid-2010

"Bank of Israel concern for strong exports may limit shekel strength."

Merrill Lynch sees the shekel strengthening further against the dollar, although the Bank of Israel's concern for strong exports will may limit the upside.

Merrill Lynch now forecasts the shekel-dollar exchange rate to hit NIS 3.4/$ by June, 2010.

In its revised forecast, Merrill Lynch sees the exchange rate ending 2009 at NIS 3.75/$, down from its earlier call of NIS 4/$. Merrill Lynch had previously expected the rate to fall through 2010 to end at NIS 3.4/$, and now sees the shekel-dollar rate dipping to NIS 3.4/$ in mid-2010 and ending 2010 at NIS 3.45/$.

While Merrill Lynch says that the shekel is driven by strong fundamentals, the bank essentially is emphasizing a weaker dollar against many currencies. The reason it gives for the weakness of the dollar is its revised macro-economic outlook, with higher forecast growth in the US and around the world. It increasingly expects stock markets to maintain their recent gains.

Merrill Lynch was bought by Bank of America in 2008 and is now a wholly-owned subsidiary of the bank.

Published by Globes [online], Israel business news - www.globes-online.com - on July 30, 2009

© Copyright of Globes Publisher Itonut (1983) Ltd. 2009

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