Gaza bloodshed weighs on shekel

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Prico sees the potential for the shekel to weaken as very limited.

The shekel is weaker today against the dollar and stable against the euro amid concerns about a worsening security situation. In late morning inter-bank trading, the shekel-dollar exchange rate is up 0.64% against the dollar at NIS 3.597/$ and up 0.04% against the euro at 4.287/€

Yesterday, the Bank of Israel set the shekel-dollar representative rate up 0.140% from Friday's rate at NIS 3.574/$ and set the shekel-euro rate up 0.703% at 4.285/€.

Amid concerns that the growing bloodshed on the Gaza border could see the security situation escalate, Prico Risk Management and Investments CEO Yossi Fraiman insists that the threat to the shekel is limited. He said, "The tension in Gaza and the territories and the recall of the Turkish Ambassadors to Israel and the US once again arouses uncertainty and a possible worsening of the security situation in our region. This uncertainty contributes to the demand for foreign currency mainly from foreign traders and small importers. In our estimation, looking to the medium and long term, the dollar is again expected to weaken. The expected elections in Italy should support the weakening of the euro and the strengthening of the dollar, and this will support the dollar in Israel too. "

He continued, "The large interest rate gap between the dollar and the shekel continues to moderate future sales and creates a dollar mountain in the coffers of large exporters. Exporters are expected to continue selling dollars as the dollar strengthens against the shekel in the near future. A large foreign currency supply can be expected in the event of a renewed devaluation that takes the shekel above NIS 3.63/$.

Published by Globes [online], Israel business news - - on May 15, 2018

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

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