Shekel continues to gain ground against dollar

FXCM Israel: It looks like new Bank of Israel Governor Karnit Flug will intervene very aggressively in the foreign currency market.

The shekel continued to strengthen against the dollar but was weakening against the euro in morning inter-bank trading today. The shekel-dollar exchange rate fell 0.30%, compared with yesterday's representative rate, to NIS 3.517/$ and the shekel-euro exchange rate rose 0.38% to NIS 4.843/€.

Yesterday, the Bank of Israel set the shekel-dollar representative exchange rate at NIS 3.528/$, down 0.198% on Monday's rate, and set the shekel-euro representative exchange rate at NIS 4.824/€, down 0.244%.

In international markets, the dollar continues to weaken on global markets and is trading at $1.377/€.

FXCM Israel research department said this morning, "On global markets the dollar index has fallen to a 9-month low-point, while against the shekel it is at a three-week low. The shekel-dollar exchange rate is against threatening to fall below the NIS 3.5/$ threshold and that could push it below September's low of NIS 3.473/$. Over recent weeks the exchange rate has succeeded in remaining stable above NIS 3.5/$ but breaking below the NIS 3.5/$ barrier will again sharpen the risk of a weak dollar for Israeli exports."

FXCM Israel added, "This will be the first test for new Bank of Israel Governor Dr. Karnit Flug. Over the four months in which she served as acting governor, she did not hesitate to use the instrument of purchasing foreign currency, and it looks as if due to the current risk she will intervene very aggressively in the foreign currency market."

Published by Globes [online], Israel business news - - on October 23, 2013

© Copyright of Globes Publisher Itonut (1983) Ltd. 2013

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