Shekel gains against dollar as markets rebound

Shekel Photo: ASAP Creative

The dollar is weakening against major currencies due to interest rate cut expectations in the coming year.

The shekel is strengthening against the dollar and weakening against the euro. In early afternoon inter-bank trading, the shekel exchange rate is down 0.34% against the dollar at NIS 3.455/$ and up 0.53% against the euro at NIS 3.8398/€.

On Friday, the Bank of Israel set the representative shekel-dollar rate up 0.961% from Thursday at NIS 3.467/$, and the representative shekel-euro rate was set up 1.612% at NIS 3.8196/€.

Markets worldwide have been recovering over the past few days after plunging as the coronavirus outbreak spread worldwide. At 1pm the Tel Aviv 35 Index was up 2.12% after losing nearly 9% over the past week.

The dollar is weakening against major currencies due to interest rate cut expectations in the coming year - one cut by April-May and three cuts over the next 12 months,

Leader Capital Markets macroeconomist Yonatan Katz says hw shekewl will be influenced by whether international markets rise or fall. He wrote, "Activities by Israeli institutional bodies are an important factor influencing the shekel. In 2019, these institutions sold $7.8 billion in foreign currency and supported the appreciation of the shekel. These sales stemmed mainly from the rise in the value of the shares they held abroad. This year the opposite effect is expected. Sharp falls in overseas markets are expected to support demand for $5-10 billion in foreign currency. It's likely that this effect was already felt in the foreign currency market last week."

Published by Globes, Israel business news - en.globes.co.il - on March 3, 2020

© Copyright of Globes Publisher Itonut (1983) Ltd. 2020

Shekel Photo: ASAP Creative
Shekel Photo: ASAP Creative
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