The shekel has appreciated sharply against the US dollar at the opening of trading on the foreign exchange market this morning. The shekel-dollar exchange rate is currently down 0.98% in comparison with yesterday's representative rate, at NIS 3.8301/$. The shekel-euro rate is up 0.55%, at NIS 4.3334/€.
The rise in the CPI in March and April is what made the Bank of Israel Monetary Committee decide against a further interest rate cut in June, the minutes of the committee's session last month, published yesterday, reveal. On May 25, the committee decided unanimously to leave the central bank's interest rate at 0.1%, the all-time low that it reached in March this year.
FXCM Israel says in its review of the foreign exchange market this morning, "The shekel-dollar pair has taken a downward turn at the opening of the trading week. After another failed attempt yesterday to break through NIS 3.88/$, the pair turned sharply downwards, and it is now below NIS 3.84/$, against a backdrop of a weaker dollar on world markets. The dollar sank yesterday after Bloomberg reported that President Obama said in conversation at the G7 meeting that he was concerned about the strengthening dollar. The White House and Obama rushed to deny the report, but the markets were already on a downward slide that was hard to stop.
"Even if the report was erroneous, it reflected the anxiety on the market and among decision makers in the US about the damaging consequences that continued appreciation of the dollar against the currencies of US trading partners could have. Only last week, the dollar climbed to a 13-year high against the yen. If this concern is borne out in macro figures, the Federal Reserve will be likely to defer its expected interest rate hike."
Published by Globes [online], Israel business news - www.globes-online.com - on June 9, 2015
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