The shekel is strengthening sharply today against the US dollar and the euro. In late morning inter-bank trading, the shekel-dollar rate is 1.25% lower at NIS 3.658/$ and the shekel-euro rate is 0.71% lower, at NIS 4.090/€.
On Friday, the Bank of Israel set the representative shekel-dollar rate down 0.537%, at NIS 3.704/$, and the representative shekel-euro rate was set 0.682% lower at NIS 4.119/€.
The shekel is strengthening for several reasons. The dollar is weakening worldwide after US Federal Reserve chairman Jerome Powell spoke of rate cuts ahead. "The time has come for policy to adjust," he said when talking about interest rates.
On Wednesday the Bank of Israel Monetary Committee will announced its interest rate decision but with inflation back above the 1%-3% annual target range a rate cut seems unlikely.
In addition Wall Street has been on the rise with Israeli investment institutions needing to sell foreign currency and buy shekels to hedge their investments. Geopolitical tensions remain high but there is cautious optimism on the hostage negotiations, which is boosting the shekel, and so far yesterday's successful pre-emptive strike on Hezbollah rocket launchers in Lebanon has passed without any threats of immediate reprisals.
Published by Globes, Israel business news - en.globes.co.il - on August 26, 2024.
© Copyright of Globes Publisher Itonut (1983) Ltd., 2024.