The shekel strengthened against the dollar, but weakened against the euro in morning inter-bank trading today. The shekel-dollar exchange rate is down 0.50%, compared with Friday's representative rate, to $3.723/$ and the shekel-euro exchange rate is up 0.36% to NIS 4.983/€.
In international markets, the dollar is traded at $1.34/€ against the euro and at ¥89.62/$ against the yen.
Foreign currency traders are reacting to yesterday's macroeconomic news: the Ministry of Finance announcement that the budget deficit in 2012 was NIS 39 billion, or 4.2% of GDP, more than double the 2% deficit in the original budget; and the Central Bureau of Statistics report that trade deficit ballooned 142% in 2010-12 to over NIS 70 billion.
Prime Minister Benjamin Netanyahu said in response, "The deficit was more or less expected." He added, "I don’t think it will have a significant effect on the country's people." Minister of Finance Yuval Steinitz said that the deficit was known in advance, and that there would be no new tax hikes this year.
The Central Bureau of Statistics will announce the Consumer Price Index (CPI) for December 2012 tomorrow.
FXCM Israel said today, "The rally in foreign stock markets should push the shekel-dollar exchange rate to below NIS 3.70/$. A continuation of the rally largely depends on the profits reported by companies traded on Wall Street, which will also weigh on the dollar in international markets."
As for the shekel-dollar exchange rate, FXCM says, "Technically, we are at a crossroads. It is not clear whether the correction upward from NIS 3.70/$ is over and we're headed for a new low point, of if we can expect another rise toward NIS 3.80/$. The question will be answered if the shekel-dollar exchange rate rises above NIS 3.80/$ or falls below NIS 3.70/$. Movement below NIS 3.72/$ will increase the pressure on the exchange rate to drop to a new low point, but movement above NIS 3.75/$ could signal that the correction is not yet over."
Published by Globes [online], Israel business news - www.globes-online.com - on January 14, 2013
© Copyright of Globes Publisher Itonut (1983) Ltd. 2013