Shekel gains despite political uncertainty

Shekel  / Photo: Shutterstock
Shekel / Photo: Shutterstock

Leader Capital Markets: While Israel's institutional bodies continue to sell foreign currency there will be pressure on the shekel to appreciate.

The shekel is strengthening today against the dollar and against the euro despite the political deadlock in Israel. In early afternoon inter-bank trading, the shekel-dollar exchange rate is down 0.42% against the dollar at NIS 3.492/$ and down 0.37% against the euro at 3.842/€.

Yesterday, the Bank of Israel set the shekel-dollar representative rate down 0.284% at NIS 3.507/$ from Monday's rate, and set the shekel-euro rate down 0.202% at 3.857/€.

The shekel is stronger this morning and has pushed the dollar below the important NIS 3.50/$ threshold. Leader Capital Markets macroeconomist Yonatan Katz said, "While Israel's institutional bodies continue to sell foreign currency there will be pressure on the shekel to appreciate."

The shekel is gaining despite the political deadlock in Israel following last week's inconclusive election results. Prime Minister Benjamin Netanyahu and Blue & White chairman Benny Gantz have agreed to talks and the notion of rotation but there is a very long way to go until the potential formation of a coalition.

Last week the US Federal Reserve cut the key interest rate by 0.25% to the 1.75%-2% range. This was the second rate cut, following a similar cut in July and narrows the dollar-shekel interest rate gap. Israel's interest rate is still far lower at 0.25%. Disagreements within the Fed will make a further interest rate cut, which is being urged by President Trump, difficult to decide upon, Katz says.

Published by Globes, Israel business news - en.globes.co.il - on September 25, 2019

© Copyright of Globes Publisher Itonut (1983) Ltd. 2019

Shekel  / Photo: Shutterstock
Shekel / Photo: Shutterstock
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