The shekel is weakening sharply today against the dollar and against the euro. In morning inter-bank trading, the shekel-dollar rate is up 1.68%, at NIS 3.624/$, and the shekel-euro rate is up 1.77%, at NIS 3.957/€.
On Tuesday before the Passover, the Bank of Israel set the representative shekel-dollar rate down 0.807% from Monday, at NIS 3.564/$, and the representative shekel-euro rate was set 0.405% lower at NIS 3.888/€.
The strengthening of the dollar against the shekel comes even though the dollar has been weakening significantly against the world's major currencies, with the dollar index declining three points to 101.8.
Prico Risk Management, Finance and Investments CEO Yossi Fraiman told "Globes" "In Israel the shekel is weakening despite two different trends. We see the dollar strengthening against the shekel while everywhere else in the world the dollar is actually weakening, and on top of this, the markets in the US are rising and we would expect the shekel to strengthen."
Fraiman explains that the shekel is weakening, when it would normally be strengthening, because of the sensitive situation in which Israel currently finds itself. "You have to understand that since the judicial reform there has been a lack of confidence in the Israeli market and we see during Passover, when most traders are foreign, foreign currency is being bought and a significant decline in exposure to the Israeli market."
When the security problem is added to this negative sentiment in which the Israeli market finds itself, it is no wonder that we see the depreciation of the shekel on the foreign currency market. Fraiman says that the coming few days will be important and will require close attention as Israeli traders return to the market after the holidays when we will see how the market reacts when foreign investors are joined by domestic investors.
Published by Globes, Israel business news - en.globes.co.il - on April 7, 2023.
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