Clal Forex: Exchange rate could head to NIS 3.50/$

Options trading is pointing to a lower shekel-dollar exchange rate, which is falling 0.24%.

Options trading is pointing to a lower shekel-dollar exchange rate, which is falling 0.24% to NIS 3.6363/$, and to a 0.33% rise in the shekel-euro exchange rate to NIS 5.015/€. There is no inter-bank foreign currency trading on Sundays.

The interest rate hike by the Bank of Israel to 2%, from 1.75%, and the dollar's weakness around the world, bolstered the shekel last week.

In an economic survey by Clal Forex, analysts say that breaking the support level of NIS 3.65/$ increases the chances for a continued drop to around NIS 3.5/$.

The Bank of Israel is expected to react more aggressively, and buy around $200 million daily (by selling shekels) in order to halt the shekel's strength.

In the short term, Clal Forex says that now it is necessary to wait for a significant correction in order to again join the fray.

The analysts say that in the short term, they would look for the dollar to slide to NIS 3.55-3.58, and then there could be a correction up to NIS 3.65/$. In the long term, the exchange rate could plummet to NIS 3.5/$ or even NIS 3.4/$.

Published by Globes [online], Israel business news - www.globes-online.com - on October 3, 2010

© Copyright of Globes Publisher Itonut (1983) Ltd. 2010

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