Shekel gains continue into August

Shekels Credit: Shutterstock Vladerina32
Shekels Credit: Shutterstock Vladerina32

The Israeli currency continues to strengthen and is trading at levels against the dollar not seen since early June.

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 0.50% against the dollar at NIS 3.365/$ and down 0.59% against the euro at NIS 3.444/€.

Yesterday, the Bank of Israel set the representative shekel-dollar rate down 0.265% today from Friday, at NIS 3.382/$, and the representative shekel-euro rate was set down 0.190% at NIS 3.464/€.

The Israeli currency continues to strengthen and is trading at levels against the dollar not seen since early June. After weakening substantially in the first half of the year, the shekel has staged a strong rebound. During July the shekel strengthened 5.1% against the basket of the world's major currencies, and gained 2.8% against the dollar and 5.4% against the euro, which is at its lowest level against the Israeli currency since October 2000.

The appreciation of the shekel over the past month comes despite the widening interest rate gap between Israel and the US, after the Federal Reserve hiked the rate by 0.75% in each of the past two months. The main engine strengthening the shekel in recent weeks has been the stock market recovery on Wall Street and the need for Israeli institutional investors to hedge their overseas positions by buying shekels.

In addition, many Israeli companies, especially in the tech sector, need to convert foreign currency to shekels in the first week of the month to pay their employees, thus further strengthening the shekel.

Published by Globes, Israel business news - en.globes.co.il - on August 2 2022.

© Copyright of Globes Publisher Itonut (1983) Ltd., 2022.

Shekels Credit: Shutterstock Vladerina32
Shekels Credit: Shutterstock Vladerina32
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