The shekel is strengthening today against the dollar and weakening against the euro. In afternoon inter-bank trading, the shekel-dollar exchange rate is down 0.56% against the dollar at NIS 3.611/$ and up 0.10% against the euro at 4.0997/€.
Yesterday, the Bank of Israel set the shekel-dollar representative rate up 0.304% at NIS 3.631/$ from Monday's rate and set the shekel-euro rate down 0.127% at 4.095/€.
The shekel is trading at its strongest levels against the dollar since September 2018, and despite losing a little ground today, its strongest levels against the euro since July 2017.
The strength of the shekel is in part related to rising inflation. Last Friday, the Central Bureau of Statistics reported that the Consumer Price Index fell only 0.1% in January, while the analysts' expectations had been a 0.3%-0.4% fall. Inflation over the past 12 months is now running at 1.2%, back within the Bank of Israel's 1%-3% target range. Some analysts are now suggesting that the Bank of Israel may again raise the interest rate earlier in 2019 than planned. However, most analysts believe that the Bank of Israel will stick to its plan for a hike later in the year.
Meanwhile, on global forex markets the dollar is weaker today due to optimism on the US-china trade talks.
Published by Globes, Israel business news - en.globes.co.il - on February 20, 2019
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