FXCM Israel: A Trump victory would shake up the markets and put in doubt a December US interest rate hike.
The shekel is strengthening today against the dollar and stable against the euro amid fears that Donald trump could win next week's US presidential elections. In early afternoon inter-bank trading, the shekel was down 0.55% against the dollar from yesterday's representative rate at NIS 3.828/$, and was down 0.08% against the euro at NIS 4.210/€.
Yesterday, the Bank of Israel set the shekel-dollar representative rate down 0.182% from Friday's rate at NIS 3.849/$, and the representative shekel-euro rate was set up 0.036% at NIS 4.213/€.
FXCM Israel said in its morning survey, "The shekel continues to strengthen against the dollar ahead of the US presidential elections next week. The shekel-dollar exchange rate has fallen below the NIS 3.83/$ mark to its lowest point since October 20. The dollar began to lose ground after the FBI announced its renewed investigation into Hillary Clinton's emails, which has reopened the race for the presidency as the latest polls show Donald Trump substantially reducing the gap with Clinton. She is perceived as a president who would continue the current economic policies whereas Trump's policies are viewed as more radical and with a risk of destabilizing the US economy. While a Clinton victory would increase the likelihood of a US rate hike in December by the Fed, a Trump victory would shake up the markets and put in doubt such a rate hike. The markets have learned from the major Brexit surprise and with the polls so close are acting with caution and reducing exposure to the dollar and risky assets. Foreign currency trading over the next week will be dictated by what happens in the US election campaign.
Published by Globes [online], Israel business news - www.globes-online.com - on November 1, 2016
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