Shekel opens week with strong gains against dollar

Shekel v dollar  credit: Tali Bogdanovsky using Adobe Firefly
Shekel v dollar credit: Tali Bogdanovsky using Adobe Firefly

The Israeli currency has been boosted by reports that a ceasefire with Hezbollah could be reached in the coming days.

The shekel is strengthening sharply against the US dollar today. In afternoon inter-bank trading the shekel is down 1.46% against the dollar at NIS 3.674/$ and is down 0.16% against the euro at NIS 3.849/€. Since the start of November the Israeli currency has been enjoying one of its best months in recent times.

Geopolitical optimism strengthening the shekel

The northern front has been heating up and in the past few days hundreds of rockets have been fired at northern Israel, the Sharon and Tel Aviv metropolitan regions but at the same time reports have been strengthening about a possible ceasefire in the coming days. Mizrahi Tefahot chief economist Ronen Menachem says, "Progress towards diplomatic arrangements on the northern front and the market's perception that the fighting in the north could be about to end brings optimism that strengthens the shekel."

In addition the past month has been positive for the shekel due to good economic data. The annual inflation forecast has moderated and the risk premium has fallen, while the most recent GDP data was more positive than expected.

Energy Finance CEO Yossi Frank adds,"What interests the market is the escalation with Iran and the fighting in the north. As soon as Iran lowered the flames, the shekel began to strengthen from the weekend and when rumors grew about a ceasefire with Lebanon, the shekel gains strengthened, and today we have already seen it move below NIS 3.70/$." Nevertheless, Frank says that the major testing point will be NIS 3.65/$ to which the shekel has not yet reached."

The dollar is weakening worldwide

While the shekel has appreciated against the dollar over the last month, the US currency itself has strengthened against a basket of major currencies. The DXY index, which measures the dollar's performance worldwide, reached 107 points during November (after starting at 104 points). But now the trend has changed and the dollar is weakening against the basket.

Menachem explains that there is now a correction for the period before and a little after the US elections: "Trump's victory in the elections led to positive sentiment in the markets, following expectations of Trump's business-friendly policies. Moreover, US monetary policy forecasts have slowed, and the heads of the Federal Reserve indicate that interest rates will not fall soon, which has strengthened the dollar."

Menachem stresses that the dollar's biggest gain has been against the euro. He explains, "The eurozone suffers from a series of problems. The escalation in the Ukraine war and the faltering economy in China, which is linked to economic activity in Europe, add to the currency's weak sentiment."

What will happen in the future?

The analysts believe that the shekel will move according to the geopolitical reality. An escalation in Israel will weaken the shekel to the higher rates of recent months while an agreement with Hezbollah, especially if will include a ceasefire or the return of the hostages, could lead to a further appreciation. In the long-term, the economic conditions in Israel, like the current account export surplus and the forecasted lower inflation, support a continuing strengthening of the shekel."

Published by Globes, Israel business news - en.globes.co.il - on November 25, 2024.

© Copyright of Globes Publisher Itonut (1983) Ltd., 2024.

Shekel v dollar  credit: Tali Bogdanovsky using Adobe Firefly
Shekel v dollar credit: Tali Bogdanovsky using Adobe Firefly
Unframe founders credit: Yossi Yarom Israeli AI enterprise platform co Unframe raises $50m

Unframe’s turnkey AI solutions enable companies to solve any enterprise AI use case at scale with fully functional, customized AI solutions for businesses in a matter of hours, rather than months.

Combatica credit: Combatica Combatica launches next-gen VR AI training platform

The Israeli company's virtual reality platform includes 50 AI generated scenarios, seven maps and even situations for operating night vision.

Shekel credit: Shutterstock Vladirina 32 Shekel volatility after US tariffs announcement

The shekel is weakening sharply against the euro, which is gaining following the unveiling of Donald Trump's tariffs plan.

Minister of Finance Bezalel Smotrich credit: Noam Moskovitz Knesset Spokesperson Treasury assesses potential damage to Israel's US exports

Israel will be charged a higher tariff on its exports to the US - its biggest export customer - than Turkey and the UAE.

Iranian flag credit: Shutterstock Why inflation haunts Iran

With a month-on-month increase of 3.3% and an annual rate of 37.1%, inflation reflects the struggles of millions of Iranians.

APM merges with lawyers from Doron, Tikotzky Kantor, Gutman credit: Eyal Merilos APM merges with 12 lawyers from Doron, Tikotzky Kantor, Gutman

With the addition of these 12 lawyers, Amit Pollak Matalon & Co. will now have 135 lawyers.

US President Donald Trump credit: Reuters Sipa USA Israel on list as Trump unveils tariffs

Relatively low reciprocal tariffs will be imposed on Israeli goods sold in the US.

Deflated unicorn credit: Shutterstock Big Tech 50 reports more huge falls in startup valuations

Israeli R&D partnership Big Tech 50 reports that an investment of $2 million in Orcam made in 2021, shrank to just $31,000 at the end of 2024.

NextFerm technologies based on yeast credit: NextFerm Food-tech co NextFerm suspends operations

The company, which produces food ingredients in yeast without genetic engineering, cannot pay its debts and is seeking a buyer.

Minister of Finance Bezalel Smotrich credit: Shlomi Yosef OECD sees recovery in growth but high inflation

The OECD Israel Economic Survey 2025 recommends that the Israeli government take several restraining measures, in order to exit the economic storm created by the war.

Dano Ben-Hur credit: Dror Sithakol Statisticians contradict BoI on impact of housing finance deals

The Central Bureau of Statistics insists the impact of 20/80 buy now pay later financing deals on the real estate market and housing prices is minimal.

Governor of the Bank of Israel Amir Yaron  credit: Government Press Office Debt fears top Bank of Israel's concerns

Most unusually, Governor of the Bank of Israel Amir Yaron's press conference last week did not focus on inflation and the impending interest rate decision.

US President Donald Trump  credit: Reuters/Leah Millis Israel moves to avoid Trump's tariffs axe

Minister of Finance Bezalel Smotrich has signed an order canceling all tariffs on imports from the US. The impact will mostly be on agricultural produce.

Forbes Rich List credit: Shutterstock Maslowski Marcin Wiz founders ranked in Forbes 2025 Rich List

There are a few dozen Israelis listed in the 2025 Forbes Real-Time Billionaires List including Wiz founders Assaf Rappaport, Yinon Costica, Roy Reznik and Ami Luttwak.

SatixFy CEO Nir Barkan credit: Ariel Barkan Canada's MDA Space to buy Israeli satcom co SatixFy

MDA Space will pay $269 million for the Israeli company, including taking on a $76 million debt and a 75% premium on SatixFy's closing price on Nasdaq yesterday.

Raising dollars credit: Shutterstock Israeli startups raised over $1b in March

Israeli privately-held tech companies have raised $2.1 billion in the first three months of 2025, according to IVC-LeumiTech, up 24% from the corresponding quarter of 2024.

Twitter Facebook Linkedin RSS Newsletters גלובס Israel Business Conference 2018