The shekel has again been strengthening today against the dollar and against the euro. In afternoon inter-bank trading, the shekel exchange rate is down 0.58% against the dollar at NIS 3.425/$ and down 0.44% against the euro at NIS 3.474/€.
Yesterday, the Bank of Israel set the representative shekel-dollar rate up 0.145% from Monday, at NIS 3.445$, and the representative shekel-euro rate was set 1.016% lower at NIS 3.489/€.
The US Federal Reserve is expected to hike the interest rate by 0.75% tonight. This will be the fourth Fed rate hike of the year, and the second successive 0.75%, bringing American rates to between 2.25% percent and 2.5%. This is double Israel's rate of 1.25% despite three rate hikes by the Bank of Israel this year. However, forex markets have probably already priced in this expected hike.
The shekel has been gradually strengthening this month from NIS 3.526/$ at the start of July, mainly due to a modest stock market recovery on Wall Street, which has resulted in Israeli institutional investors selling foreign currency to hedge their overseas positions.
Published by Globes, Israel business news - en.globes.co.il - on July 27 2022.
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