The shekel is gaining strongly against the dollar and also strengthening against the euro. In morning inter-bank trading, the shekel-dollar rate is 1.73% lower at NIS 3.767/$, and the shekel-euro rate is 0.36% lower at NIS 4.095/€.
Yesterday, the Bank of Israel set the representative shekel-dollar rate down 0.879% from Monday, at NIS 3.833/$, and the representative shekel-euro rate was set 0.544% lower at NIS 4.110/€.
Despite the ongoing war against Hamas in Gaza and the escalation in the north this week, the shekel is now trading at its strongest against the US dollar since mid-August. The Israeli currency has strengthened by 6.6% against the US dollar since the start of November and at one point yesterday was trading at NIS 3.75/$. In part this has been due to dollar weakness on world markets with the latest US inflation figures lower than expected, bringing potential interest rate cuts nearer.
Later today the Central Bureau of Statistics will announce Israel's CPI for October. With assumptions that the figure will be well below the October 2022 CPI rise of 0.6%, analysts expect inflation to fall from its current level of 3.8% to 3.5%.
The shekel has also been boosted by an economic survey earlier this week by ratings agency S&P, which sees the Israeli economy returning to strong 5% growth in 2025, after growing 1.5% this year and 0.5% next year, providing the war does not escalate. S&P added that an actual cut in Israel's credit rating in the next 12-24 months is only likely if the influence of the conflict on economic growth, the fiscal situation and Israel's balance of payments is more significant than the company expects, or if the conflict expands substantially.
Published by Globes, Israel business news - en.globes.co.il - on November 15, 2023.
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