Shekel falls below 3.50/$

FXCM: So long as the shekel-dollar exchange rate is below NIS 3.50-3.52/$, there is a strong risk of a fall to a new low.

The shekel has strengthened slightly against the dollar and euro in morning inter-bank trading today. The shekel-dollar exchange rate has fallen 0.09%, compared with yesterday's representative rate, to NIS 3.499/$ and the shekel-euro exchange rate has dipped 0.06% to NIS 4.765/€.

Leading Wall Street indices fell on Monday, and Asian markets are falling today, following the publication of weak macroeconomic fitures.

Governor of the Bank of Israel Dr. Karnit Flug's remarks to the Knesset Finance Committee yesterday infuriated exporters. "The main problem with exports lies with commodoties and import alternatives, which are hard to compete against given the exchange rate," she said, adding, "The sensitivity of exports to the exchange rate is not very high, amounting to 0.2%, meaning that a 1% appreciation in the exchange rate affects exports by just 0.2%. This is not a very high sensitivity, and high-tech industries are the least affected."

FXCM Israel says today, "The positive momentum created by last week's intervention by the Bank of Israel has halted, and the shekel-dollar exchange rate is unable to consolidate above NIS 3.50/$, which again puts it at risk. Only movement above NIS 3.50/$ and NIS 3.52/$ may indicate a U-turn in the exchange rate. So long as the exchange rate is below these levels, there is a strong risk of a fall to a new low."

Published by Globes [online], Israel business news - - on January 7, 2014

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

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