The shekel is weakening against the dollar and strengthening against the euro. In afternoon inter-bank trading, the shekel-dollar rate is 0.32% higher at NIS 3.841/$, and the shekel-euro rate is 0.41% lower at NIS 4.028/€.
Yesterday, on the foreign exchange market, the Bank of Israel set the representative shekel-dollar rate up 0.131% from Friday, at NIS 3.829/$, and the representative shekel-euro rate was set 0.227% lower at NIS 4.044/€.
The weaker shekel against the dollar reflects the strength of the US currency on global markets. The US Dollar Index (DXY), which measures the value of the US dollar relative to a basket of foreign currencies, has risen to 107 points, the highest since last November.
The dollar has been strengthening since US Federal Reserve chair Jerome Powell indicated that another interest rate hike is likely. The strong dollar fuels inflation in Israel because imported goods and commodities like oil become more expensive.
IBI chief economist Rafi Gozlan told "Globes," "The US is in a very strong position economically now. A comparison between the US and the eurozone indicates that growth in the US is stronger compared to the sluggishness of the European economy. Moreover, the markets do not see further increases in interest rates in Europe."
Published by Globes, Israel business news - en.globes.co.il - on October 3, 2023.
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