The shekel is weakening against the euro, but strengthening against the dollar in morning inter-bank trading today, amid the turmoil in Greece. The shekel-dollar exchange rate is down 0.14%, compared with Friday's representative rate, to NIS 3.708$, reversing direction after early losses. The shekel-euro exchange rate is up 0.07% to NIS 4.932/€, also reversing its initial trend.
After a late-night session, the Greek Parliament approved the government's austerity plan, thus removing the last obstacle for Greece to receive the €130 billion bailout from the EU. There were violent demonstrations against the austerity plan outside the parliament building during the vote.
The Greek government will cut its budget by €3.3 billion this year through public sector pay cuts, pension reductions, and the firing of thousands of public sector employees.
Bank of Jerusalem financial markets manager Eitan Admoni explained today, "Although the shekel-dollar exchange rate fell below the NIS 3.70/$ level for a few hours, the drop was neither strong nor credible enough."
Admini believes that last night's approval of the Greek austerity plan will somewhat ease the euro's temporary strength against the dollar at the start of trading in international markets, a classic case of buy on rumor, sell on fact. "It's possible that this trend, if it materializes, will see the dollar start to strengthen against the shekel and other currencies," he said.
On Wednesday, the Central Bureau of Statistics will publish the Consumer Price Index (CPI) for January. Analysts expect the CPI of all of 0.2% in the CPI for the month.
Published by Globes [online], Israel business news - www.globes-online.com - on February 13, 2012
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