The shekel is gaining today against the US dollar and euro. In afternoon inter-bank trading the shekel is 0.21% lower against the dollar at NIS 3.731/$ and 049% lower against the euro at NIS 3.926/€.
Yesterday, the Bank of Israel set the representative shekel-dollar rate down 0.107% from Tuesday, at NIS 3.739/$, and the representative shekel-euro rate was set 0.137% lower at NIS 3.945/€.
Since the election of Donald Trump as the next US President the dollar has been strengthening against the world's major currencies. The dollar is 3.5% stronger against the euro, 2.8% stronger against sterling, 2.7% stronger against the Japanese yen, 1.8% stronger against the Australian dollar and 1% stronger against the Canadian dollar. But the shekel bucks this trend and is 0.5% stronger against the US dollar.
Bank Leumi head of market strategy Kobi Levi says this is because sentiment on the Israeli economy has improved. "We see bond yield margins of Israel's bonds declining, the risk premium moderating and the local stock market recording handsome gains. Inflationary expectations for the year ahead have also moderated."
He adds, "Both currencies are expected to strengthen, each for its own reasons, but the shekel's prospects depend on the war and its end, while events that support the dollar are already coming true, such as interest rates not falling quickly." In Levi's assessment, the end of the war would be expected to lead to a strengthening of the local currency, but he cools expectations slightly, since part of the risk premium has already begun to decline and the markets are pricing in the improvement in the security situation."
Published by Globes, Israel business news - en.globes.co.il - on November 21, 2024.
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