Shekel appreciation maintains momentum


FXCM Israel: The weakening of the dollar is likely to continue and strengthen.

The shekel is again strengthening this morning in inter-bank trading against the dollar and against the euro. The shekel-dollar rate is down 0.78% at NIS 3.844/$ compared with yesterday's representative rate, and the shekel-euro rate is down 0.71% at NIS 4.316/€.

Yesterday, the Bank of Israel set the shekel dollar representative rate down 1.249% from last Friday's rate before the holiday at NIS 3.874/$, and the representative shekel-euro rate was set down 0.79%, at NIS 4.347/€.

FXCM Israel said in its market review this morning, "The shekel-dollar exchange rate continues to fall and it seems that the negative erosion of the dollar on Israel's foreign currency exchange market is only getting stronger and stronger. The two currencies are testing the NIS 3.85/$ level, which was last month's low point, and falling below that might take out of the game a large number of long traders and speed up the fall to NIS 3.83/$. The fall in the shekel-dollar exchange rate parallels the weakening of the dollar on global markets in recent days due to strengthening of the belief that the US Federal Reserve will postpone its planned interest rate hike until the first quarter of 2016. The fall in interest rate expectations has brought back the negative correlation between the dollar and stock markets, at least temporarily, with positive sentiment over the past few days on capital markets, and the rise in oil prices has also put the dollar under pressure. Weakening of the dollar is likely to continue and strengthen throughout the week, especially if we see no new exceptionally positive data from the US or remarks from Fed officials that will put the possibility of a rate hike back on the agenda."

Published by Globes [online], Israel business news - - on October 7, 2015

© Copyright of Globes Publisher Itonut (1983) Ltd. 2015

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