With the UK beset with difficulties under new Prime Minister Boris Johnson, and a no-deal Brexit looking increasingly likely, sterling has slumped to a two year low against the dollar. Even more remarkably, the shekel-sterling representative rate fell 0.858% yesterday to NIS 4.345/£ and is falling even further today. The shekel is at its strongest against sterling since October 1993, a month after then Prime Minister Yitzhak Rabin and PLO leader Yasser Arafat shook hands on the White House lawn to seal the Oslo accords.
The UK's woes aside, this is also due the appreciation of the shekel, which is strengthening again today against the dollar and against the euro. In afternoon inter-bank trading, the shekel-dollar exchange rate is down 0.52% against the dollar at NIS 3.502/$ and down 0.51% against the euro at 3.903/€.
Yesterday, the Bank of Israel set the shekel-dollar representative rate down 0.028% at NIS 3.525/$ from Friday's rate, and set the shekel-euro rate down 0.087% at 3.922/€.
The shekel is trading at its strongest levels for 16 months against the dollar and at its strongest against the euro since June 2017. The strength of the Israeli economy and expected rate cuts in the US and Europe have all strengthened the shekel.
Meanwhile, distressed Israeli exporters are waiting for the Bank of Israel to resume purchasing significant amounts of foreign currency in order to weaken the shekel. But so far new Bank of Israel Governor Prof. Amir Yaron seems less inclined than his predecessors Dr. Karnit Flug and Prof. Stanley Fischer to accommodate exporters needs.
Published by Globes, Israel business news - en.globes.co.il - on July 30, 2019
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