Shekel at strongest for three months against dollar

Shekel Photo: ASAP Creative

Israel Discount Bank chief economist: We expect the Bank of Israel to make one rate hike this year and three hikes in 2019.

The shekel is strengthening today against the dollar and against the euro. In morning inter-bank trading, the shekel-dollar exchange rate is down 0.80% against the dollar at NIS 3.590/$ and down 0.44% against the euro at 4.177/€.

Yesterday, the Bank of Israel set the shekel-dollar representative rate down 0.166% at NIS 3.619/$ from Tuesday's rate and set the shekel-euro rate up 0.131% at 4.195/€.

The shekel is trading at its strongest against the dollar since June and has slipped below the NIS 3.60/$ threshold. The shekel has been strengthening since the Bank of Israel's interest rate decision last week. Even though the Bank of Israel kept the rate at its historical low of 0.1%, where it has been anchored since March 2015 due to Israel's negative inflation environment, the Bank's comments on inflation has raised expectations that a rate hike is imminent.

Israel Discount Bank (TASE: DSCT) chief economist Nira Shamir said, "We see a rate hike in 2018 and three hikes in 2019. In our estimate the Bank of Israel's interest rate will be 1% at the end of 2019. However, as long as the identity of the next Bank of Israel Governor is not known, there is a higher level of uncertainty."

On world forex markets, the dollar has been strengthening against the major currencies with no end in sight to the trade war between the US and China and investors seeking a safe haven currency.

Published by Globes [online], Israel business news - www.globes-online.com - on September 6, 2018

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

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Shekel Photo: ASAP Creative
Shekel Photo: ASAP Creative
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