FXCM Israel: The chances of an interest rate cut have increased following the lower than expected CPI figures for September.
The shekel is weakening against the dollar and euro in inter-bank trading this morning. The shekel-dollar exchange rate has risen 0.13%, compared with yesterday's representative rate, to NIS 3.551/$, and the shekel-euro exchange rate has risen 0.29% to NIS 4.80/€.
FXCM Israel research department said this morning, "The dollar-shekel exchange rate rose yesterday by almost NIS 0.03 to above the NIS 3.55/$ threshold and that's at a time when the dollar was weakening on world's markets against most major currencies. The relative weakness of the shekel can be attributed among other things to the Consumer Price Index, which was published last night and indicated lower inflation than expected. This also points towards a further weakness in the economy and increases the chances of an additional interest rate cut, and in its wake the weakening of the shekel."
FXCM added, "If the shekel-dollar exchange rate will consolidate its position above NIS 3.55/$, this could push the currencies towards NIS 3.57/$ and even to NIS 3.59/$.
Published by Globes [online], Israel business news - www.globes-online.com - on October 16, 2013
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