Shekel continues losing ground

Shekel Photo: ASAP Creative
Shekel Photo: ASAP Creative

Psagot Investment House head of macro research Guy Beit-Or predicted that a year from now, the shekel will be at the current rate or stronger.

The shekel is weakening today against the dollar and against the euro. In afternoon inter-bank trading, the shekel-dollar exchange rate was up 0.68% against the dollar at NIS 3.254/$ and the shekel-euro rate was up 0.47% at NIS 3.939/€.

Yesterday, the Bank of Israel set the representative shekel-dollar rate 0.155% higher from Monday, at NIS 3.232/$, and the representative shekel-euro rate was set 0.634% higher, at NIS 3.921/€.

The shekel continues to depreciate after last week's unexpected announcement by the Bank of Israel that it will buy $30 billion in foreign currency in 2021 in order, "to provide the market with certainty regarding the Bank’s commitment to dealing with the recent sharp appreciation."

Last Thursday, just before the Bank of Israel's surprise announcement, the shekel had appreciated to NIS 3.116/$, its strongest against the dollar since 1996. While the announcement has weakened the shekel by nearly 4.5% against the dollar, analysts are skeptical about the longer term effect of the Bank of Israel's move. "Bloomberg" reports that analysts at Goldman Sachs are leaving their 12-month forecast at NIS 3.20/$

Psagot Investment House head of macro research Guy Beit-Or predicted that a year from now, the shekel will be at the current rate or stronger. He told "Bloomberg," "Now the move is fully priced in and the regular market dynamics will continue to exert more appreciation pressures on the shekel moving forward, as long as global equities will continue to rise and the dollar will weaken."

Published by Globes, Israel business news - en.globes.co.il - on January 20, 2021

© Copyright of Globes Publisher Itonut (1983) Ltd. 2021

Shekel Photo: ASAP Creative
Shekel Photo: ASAP Creative
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