The unexpectedly poor showing by UK Prime Minister Theresa May and her Conservative party in the British general election and the resulting "hung" parliament has caused volatility on foreign currency markets worldwide today, although stock markets, even in London, responded with gains.
The shekel continues its recent powerful gains and was stronger today against the dollar and the euro. Earlier today, the Bank of Israel set the shekel-dollar representative rate down 0.198% at NIS 3.532/$ from yesterday's rate and set the shekel-euro rate down 0.562% at 3.954/€.
The shekel-sterling rate fell 2.02% to NIS 4.485/£, a rate not seen since April 1994.
The shekel continued to strengthen in afternoon inter-bank trading. The shekel-dollar rate was down a further 0.19% at NIS 3.525/$, a new three-year low, and the shekel-euro rate was down 0.33% at NIS 3.941/€.
The Bank of Israel has been sitting on the sidelines for the past few weeks despite pressure to intervene and purchase foreign currency to weaken the shekel and help exporters. Next week, the US Federal Reserve is expected to raise the interest rate but the market has probably already priced in the rate hike so it is not expected to strengthen the dollar significantly.
Published by Globes [online], Israel business news - www.globes-online.com - on June 9, 2017
© Copyright of Globes Publisher Itonut (1983) Ltd. 2017