BoI: Shekel appreciated 0.6% against dollar in Q3

Shekel Photo: Shutterstock

The market now believes there will be no euro interest rate hike until after September 2019.

The shekel appreciated 0.6% against the dollar in the third quarter, according to a report by the Bank of Israel Research Department. The shekel appreciated 0.9% against the euro and 2.7% against the weighted basket of the currencies of Israel's main trade partners. The figures are for the effective nominal exchange rate.

The global dollar trend in the third quarter was mixed. The dollar appreciated 0.3% against the euro, 2.5% against the Japanese yen, and 0.8% against the British pound, but depreciated 1.7% against the Swiss franc.

The shekel depreciated 0.08% against the dollar today, with the representative shekel-dollar exchange rate being set at NIS 3.704/$. The shekel depreciated 0.131% against the euro, with the representative exchange rate being set at NIS 4.21/€.

The euro depreciated 0.4% against dollar, and was traded at $1.136/€, but later appreciated by 0.2%, after German Chancellor Angela Merkel announced that she would not run for the leadership of her party.

The Chinese yuan hit a 10-year low against dollar, after China warned investors late last week to stop gambling on a decline in the Chinese currency.

The US Dollar Index rose 0.4% to 96.6 points, a 10-month high against the basket of currencies.

Yaniv Hevron, chief strategist at investment house Alumot, commented, "One of the main reasons at least for the Europeans for the strong dollar is the belief that an interest rate hike in Europe is becoming more remote. It will be very hard to raise the interest rate at this stage. Publication of strong macroeconomic data in the US later this week will affect what follows."

The prevailing view in the market was that European Central Bank President Mario Draghi would raise the interest rate around September 2019. Hevron says that it is now believed that this will take more time.

Published by Globes, Israel business news - en.globes.co.il - on October 29, 2018

© Copyright of Globes Publisher Itonut (1983) Ltd. 2018

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Shekel Photo: Shutterstock
Shekel Photo: Shutterstock
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