The shekel was mixed against leading foreign currencies this morning, as the dollar recovered from a recent slide against the euro in world markets.
At 11:10 a.m. Israel time, the shekel had weakened 0.4% to NIS 4.8327/$ in inter-bank trading, compared with Friday’s representative rate of NIS 4.814/$. But at the same time, the shekel had advanced 0.6% to NIS 5.175 against the euro, compared with Friday’s rate of NIS 5.208/€.
The shekel’s slide against the dollar came as the greenback advanced to a one and a half week high against the euro, which was trading at $1.071 at web-posting.
Last week, the shekel strengthened 1.5% against the dollar as foreign investors unloaded foreign currency after election tensions faded, traders said. Gal Levasovsky, a dealer at United Mizrahi Bank, says that on a technical basis the shekel should continue to advance against the dollar.
According to Levasovsky, those looking to buy dollars may prefer to wait for the exchange rate to come down from the high rates seen at the start of last week.
“We see resistance against any rise above NIS 4.84/$ and think the shekel appreciation hasn’t finished yet. Also, it’s unclear whether the foreign investors have completed sales of foreign currency,” the Mizrahi dealer said.
Local broker Nessuah Zannex said yesterday in a report that the shekel would trade around NIS 4.82/$ this week. According to the Nessuah Zannex report, trading this week will be influenced mainly by reports of progress towards forming a coalition government, and any developments concerning a possible US-led attack against Iraq.
Meanwhile, Israel’s high interest rate of 8.9% underpins the Israeli currency by making dollar investments relatively expensive. Last week, the Bank of Israel kept interest rates on hold, leaving the gap between Israeli and US rates at 7.65%.
Published by Globes [online] - www.globes.co.il - on 3 February, 2003