Shekel opens month with gains against dollar

Shekels Photo: Shutterstock Vladerina32
Shekels Photo: Shutterstock Vladerina32

The US dollar has been sliding today against all the world's major currencies after rallying over the past month due to hawkish comments from US Federal Reserve chairman Jerome Powell.

The shekel is strengthening today against the dollar and weakening against the euro. In afternoon inter-bank trading, the shekel exchange rate is down 0.77% against the dollar at NIS 3.170/$ and up 0.21% against the euro at NIS 3.572/€.

Yesterday, the Bank of Israel set the representative shekel-dollar rate down 0.031% from Friday, at NIS 3.195/$, and the representative shekel-euro rate was set 0.281% higher at NIS 3.565/€.

The US dollar has been sliding today against all the world's major currencies after rallying over the past month due to hawkish comments from US Federal Reserve chairman Jerome Powell about tightening monetary policy and the need for interest rate hikes. However, concerns are receding that the Fed plans a major 0.50% interest rate hike at its meeting next month and this has tempered the strength of the US currency.

The shekel is also strengthening against the dollar after yesterday's steep gains on Nasdaq. There is a high correlation between the shekel-dollar rate and the Nasdaq's performance. Israeli institutional investors hedging their overseas investments and need to buy shekels, when the market rises and sell shekels, when the market falls to comply with the terms of their investment policies.

The Bank of America has forecast that there may be as many as seven rate hikes in 2022 but other economists believe that such a drastic move would be too harmful for the US economy.

Published by Globes, Israel business news - en.globes.co.il - on February 1, 2022.

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

Shekels Photo: Shutterstock Vladerina32
Shekels Photo: Shutterstock Vladerina32
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