Fears of a narrowing of the interest rate gap versus the US are still affecting trading.
Clal Finance Gift says in its foreign exchange market survey published this morning that, like almost every other currency, the shekel has weakened against the US dollar following the release of very strong economic data in the US at the end of last week. Fears of a substantial narrowing of the interest rate gap between the shekel and the shekel/dollar rate to cross the NIS 4.6/%$ line and climb to NIS 4.635/$. The impact of military events in Gaza was a temporary factor that helped the rate to rise. It was halted above NIS 4.63/% thanks to profit taking, and foreign currency conversions by exporters.
Figures showing an impressive rise in Israeli exports in the first quarter of the year, and the minister of finance's prediction of a 5% growth rate for the Israeli economy in 2005, supported the shekel. On Friday morning, the shekel/dollar rate moderated, as the market awaited publication of the April CPI figures.
For the coming week, the shekel/dollar rate will find support at NIS 4.6/$, with the first resistance point being at NIS 4.64/$, and the next at NIS 4.66/$.
Published by Globes [online] - www.globes.co.il - on May 16, 2004