The foreign exchange market has started today’s session with a modest shekel depreciation, on the back of yesterday’s terror attack in Rishon Le-Zion, in which two Israelis were killed and dozens wounded.
At web-posting, the shekel is trading around NIS 4.8927/$, a 0.57% depreciation from yesterday’s representative rate of NIS 4.865/$.
The attack in Rishon Le-Zion is the second to hit the town in two weeks, and is also the second deadly suicide bombing in Israel this week. In a separate incident this morning, an explosion occurred at a Pi Glilot fuel depot, located north of Tel Aviv. No one was injured in that explosion, which was caused by a remote-control device attached to a tanker, police said.
The latest deadly bombings, as well as the significant number of failed Palestinian attacks - such as the two suicide bombers who only succeeded in killing themselves at Hata’anachim junction - and other incidents since the end of “Operation Defensive Shield”, seem to indicate that the security situation is steadily deteriorating.
Over the past few days, activity in the foreign exchange market has been moderate, while turnovers in dollar options were relatively large. This coming Tuesday, dollar and euro options will expire. Sources in the market said that over the past few days, investors were positioning themselves for next month.
On the economic front, traders are waiting for the interest rate announcement from the Bank of Israel on Monday. After the high CPI for April (1.5%), expectations are for a sharp increase in the central bank’s key interest rate from its current level of 4.6%. The general feeling in the market is that interest rates will rise 1%, although a minority believe the rate hike will be more moderate.
Published by Globes [online] - www.globes.co.il - on 23 May, 2002