Shekel slightly weaker against dollar

FXCM: The Bank of Israel's interventions are having no psychological effect on the market.

The shekel has weakened against the dollar, but strengthened against the euro, in morning inter-bank trading today. The shekel-dollar exchange rate is up 0.09%, compared with Friday's representative rate, to NIS 3.492/$, but the shekel-euro exchange rate is down 0.41% to NIS 4.725/€.

On Friday, the Bank of Israel set the shekel-dollar representative exchange rate at NIS 3.489/$, down 0.09%, compared with Thursday's rate, and set the shekel-euro representative exchange rate at NIS 4.745/€, down 0.14%.

In international markets, the dollar is flat against the euro and pound, traded at $1.353/€, and $1.624/£, but has weakened 0.2% against the yen to ¥104.12/$.

Wall Street is closed today for Martin Luther King Day. Asian markets are falling, and futures point to losses at the opening on European markets.

Last week, the Bank of Israel resumed its interventions in the foreign currency market, reportedly buying up to $100 million. FXCM Israel says today, "The effect of the latest intervention was barely felt. For the Bank of Israel, this is a bad sign. It shows that its steps have no psychological effect on the market, and big traders are continuing to dictate the price's movement. It seems that the market is still leaning in favor of the shekel."

Atrade believes that the shekel-dollar exchange rate will easily rise above the NIS 3.50/$ threshold today, because of the strengthening of the dollar in international markets. "If the currency pair can consolidate its position above NIS 3.50/$, we can expect a further rise toward NIS 3.55/$. A failure to break through the NIS 3.50/$ level will again put downward pressure on the excahnge rate. In that case, we can expect a further drop toward NIS 3.45-3.40/$."

Published by Globes [online], Israel business news - - on January 20, 2014

© Copyright of Globes Publisher Itonut (1983) Ltd. 2014

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