The shekel is strengthening today against the dollar and against the euro. In afternoon inter-bank trading, the shekel was down 0.15% against the dollar at NIS 3.251/$ and down 0.28% against the euro at NIS 3.936/€.
Yesterday, the Bank of Israel set the representative shekel-dollar rate 0.246% higher from Tuesday, at NIS 3.256/$, and the representative shekel-euro rate was set 0.272% higher, at NIS 3.947/€.
The shekel is again hovering around the NIS 3.25/$ mark, its strongest since July 2008, despite repeated major foreign currency purchases by the Bank of Israel including on Tuesday afternoon.
Leumi head of market strategy Kobi Levi told "Globes" that the shekel is expected to continue strengthening due to Israel's current account surplus and the expected widening of the surplus to 4.5%-5% over the coming few years.
He said, "The main forces supporting the strength of the shekel will be the new trade relations with the Gulf states, high-tech sector activities and the rise in the current account and services surplus despite stability in the balance of trade deficit with a certain potential to reduce this with gas exports."
Levi added, "In addition the flow of investments comping into Israel is expected to continue and benefit direct investments and financial investments. On the other hand, in the short term there are risk factors such as the development of a new currency war as happened in 2009 after the sub-prime crisis when all countries tried to lower the value of their currency compared with others."
Published by Globes, Israel business news - en.globes.co.il - on December 10, 2020
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