In morning inter-bank trading today, the shekel has weakened against the dollar for the third straight day since the Bank of Israel intervened in the foreign currency market on Monday. The shekel has strengthened against the euro, however. The shekel-dollar exchange rate has risen 0.17%, compared with yesterday's representative rate, to NIS 3.639/$, but the shekel-euro exchange rate has fallen 0.07% to NIS 4.755/€.
Yesterday, the Bank of Israel set the shekel-dollar representative exchange rate at NIS 3.633/$, up 0.11% on Tuesday's rate, and set the shekel-euro representative exchange rate at NIS 4.758/€, up 0.55%. The shekel-dollar exchange rate has risen 1.8% since Monday.
On Monday, the Bank of Israel bought an estimated $100 million, in its first intervention in the market since July 2011. The intervention came when the shekel-dollar exchange rate fell to NIS 3.592/$, below the psychologically significant level of NIS 3.60/$, which the Bank of Israel has apparently marked as a kind of test level for intervention.
In international markets, the dollar has strengthened slightly against the euro to $1.3067/€ and against the pound to $1.5331/£, but weakened 0.15% against the yen to ¥99.66/$.
FXCM Israel said today, "Despite the Bank of Israel's intervention, economic factors are still supporting further strengthening of the shekel: fiscal restraint; expected revenues from gas discoveries; and the shekel's higher interest rate. It is definitely possible that in the coming days we shall see another attempt by speculators to challenge the Bank of Israel's position."
Yesterday, the US Federal Reserve Board published the minutes of its last interest rate meeting earlier than scheduled, because they were leaked to the media. The minutes state that several board members are worried about an inflationary outbreak at any moment, if the Fed continues its current monetary policy.
Atrade said, "As time passes, pressure on Bernanke grows, and more Fed board members are joining the opposition. The great fear is that the Fed will begin raising the interest rate if and when inflation breaks out, and severely harm the US economy."
Published by Globes [online], Israel business news - www.globes-online.com - on April 11, 2013
© Copyright of Globes Publisher Itonut (1983) Ltd. 2013