The shekel is stable today against the US dollar and against the euro after a week of heavy losses. In early afternoon inter-bank trading, the shekel-dollar rate is 0.04% lower at NIS 3.761/$ and the shekel-euro rate is unchanged, at NIS 4.155/€.
Yesterday, the Bank of Israel set the representative shekel-dollar rate up 0.293% from Monday, at NIS 3.763/$, and the representative shekel-euro rate was set 0.275% higher at NIS 4.154/€.
The shekel is trading at its weakest level for a month against the US dollar because the sharp falls on the US stock markets have forced Israeli institutional investors to sell shekels and buy foreign currency to hedge their position. Continued tensions in the north and fading hopes of a hostage deal have also contributed to the weakness of the Israeli currency.
But HSBC urges investors to bet on the shekel. In its weekly report Leader Capital Markets cites an HSBC report which sees the shekel strengthening to NIS 3.60/$ by the end of 2024 and NIS 3.40/$ by the end of 2024. HSBC's bullish forecast on the shekel is due to positive basic factors in Israel and a conservative monetary policy, compared with the expectation of interest rate cuts in Western countries. The market has probably already priced in a 0.25% rate cut by the US Federal Reserve next week.
Published by Globes, Israel business news - en.globes.co.il - on September 11, 2024.
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