Trading in the shekel has been mixed at today's opening. The shekel-dollar rate is currently up 0.65% in comparison with Friday's representative rate, at NIS 3.8578/$, while the shekel-euro rate is down 0.56%, at NIS 4.7817/€. The main reason for the shekel's weakness against the US dollar is estimated to be the downgrading by Fitch of its rating outlook for Israel.
At 16:00 today, the Bank of Israel Monetary Committee will announce the bank's interest rate for December. Most analysts believe that the rate will remain at its current level of 0.25%.
FXCM Israel says in its market review this morning, "The shekel is collapsing because of Fitch's announcement of a downgrade of its rating outlook for Israel from Positive to Stable. This negative announcement, which represents a warning signal for investors and foreign currency traders, led to a sell-off of the shekel, which in fact began on Friday. In current condition, the shekel-dollar rate could climb to NIS 3.9/$ even before the end of the year.
"Despite the peak rates at which the shekel-dollar pair is traded, and after the uninhibited rally of the past few months, those holding long positions on the dollar against the shekel are not rushing to take profits. Nor are traders daring to go against the trend and buy the shekel, even when a technical opportunity arises."
Published by Globes [online], Israel business news - www.globes-online.com - on November 24, 2014
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