The shekel has weakened against the major currencies this morning. The shekel-dollar exchange rate is currently up 0.59% in comparison with Friday's representative rate, at NIS 3.8386/$, and the shekel-euro rate is up 0.44%, at NIS 4.355/€. The Bank of Israel was active in trading this morning, and earlier in the session shekel exchange rates against both major currencies were up by nearly 0.9%.
The sporadic violence in Israel continued overnight, with an attack at the Beersheva bus station. A Palestinian armed with a handgun managed to enter the bus station, shoot dead an Israeli soldier and take his weapon, and then spray the bus station with automatic fire, wounding ten more people, three of them soldiers who are reported seriously hurt. The dead soldier has been named as Seargant Omer Levy, 19, of Moshav Sde Hemed, near Kfar Sava. A foreign worker who in the confusion was mistaken for the attacker was shot and wounded, and then beaten by the angry crowd. He died overnight of his injuries. The Palestinian terrorist himself was shot dead on the spot.
It was reported today that the Chinese economy grew by 6.9% in the third quarter, which is better than forecast, but still the weakest quarterly GDP growth figure since the financial crisis that broke out in 2008. The world's second largest economy is still holding on and not deteriorating as it was feared it might do two months ago, when it pulled Asian and global stock markets down steeply.
According to Bank of America Merrill Lynch figures, money is flowing into emerging markets stocks for the first time in three months.
Smart Capital CEO Itzik Noy says, "The shekel, as an exotic currency, is more volatile than European currencies. Its relative strength, deriving from the interest rate gap, leads to constant overshooting. It should be stressed that the shekel-dollar rate is currently declining mainly because of the weakness of the dollar across the board, and not really because of the strength of the shekel.
"The macro data cycle in the US has been characterized by an initial negative two weeks, with retail sales and production indices showing a weaker trend that at this time last year, followed by a positive two weeks mainly focusing on very positive real estate market figures. The overshooting creates an excellent opportunity for buying dollars. We expect that against a background of positive US macro figures in the next two weeks, the shekel-dollar rate will rise to the resistance levels of NIS 3.88/$ and NIS 3.91/$ initially, and towards NIS 4/$ in the medium term. We expect the Bank of Israel to intervene in foreign exchange trading and the start of a rise in the amounts of dollars that the bank purchases."
Published by Globes [online], Israel business news - www.globes-online.com - on October 19, 2015
© Copyright of Globes Publisher Itonut (1983) Ltd. 2015