The shekel appreciated 0.66% today, and the representative rate was set at NIS 4.637/$. The shekel has returned to its level of four months ago.
The dollar traded at the even lower level of NIS 4.63/$ in interbank trading. The shekel's appreciation has been steady since the interest rate hike at the end of June. Since peaking at NIS 4.994/$, the shekel has risen NIS 0.357, appreciating a cumulative 7.2%. The appreciation will contribute to low and even negative CPI rates over the next three months.
Foreign currency trading in cash was moderate today, totaling $500-700 million. Most activity was by banks and institutional entities, including mutual funds specializing in foreign currency. There was no exceptional activity by foreign banks.
The shekel appreciated 1.23% against the euro today, reaching NIS 4.6785/€; 1.15% against the pound sterling, reaching NIS 7.2966/£; and 0.92% against the yen, reaching NIS 3.9873/100 yen.
Foreign currency market sources noted most sales in the past two days were by local mutual funds specializing in foreign currency (unlike funds that invest in foreign bonds). These funds recorded tens of millions of shekels in withdrawals in the past two days, putting strong negative pressure on the shekel-dollar exchange rate.
Capital market players believe the shekel’s appreciation against the dollar will slow and the shekel-dollar exchange rate will be NIS 4.60-4.70/$ in the coming days – as long as there is no significant external event, especially on the diplomatic-security front.
Published by Globes [online] - www.globes.co.il - on July 22, 2002