Despite a continued hangover in Europe from last week's UK EU referendum results, Israeli markets say the Brexit effect fading this morning. European stock markets were down about 0.5% at the opening this morning and sterling lost another 1.75% against the dollar, but the Tel Aviv Stock Exchange (TASE) posted gains and the shekel was relatively stable - weaker against the dollar and stronger against the euro.
The Tel Aviv 25 index opened 0.89% higher this morning at 1399.50 points after losing 3.17% in trading yesterday although the rally weakened in early afternoon trading and by 1.30 pm the Tel Aviv 25 Index was down 0.13% at 1,385.41 points.
The shekel was up 0.37% against the dollar from Friday's representative rate at NIS 3.899/$ while it was down 0.48% against the euro at NIS 4.298/€. The Bank of Israel set the shekel-dollar representative rate up 1.622% on Friday at NIS 3.885/$, and the representative shekel-euro rate was set down 0.795% at NIS 4.343/€. The shekel strengthened against sterling by 6.214% on Friday with the rate falling to NIS 5.34/£.
FXCM Israel said today, "Brexit will also preoccupy the Bank of Israel, which will publish its interest rate decision today. The bank is not expected to change the interest rate but the way that Governor Karnit Flug talks about the extreme volatility in the foreign exchange markets may influence shekel-dollar trading. In the current atmosphere of risk aversion and uncertainty the shekel is expected to weaken against the dollar. On Friday we already saw the shekel-dollar rate reach NIS 3.91/$ before retreating to Nis 3.88/$. Continued aversion to risk in the markets is expected to continue pushing the shekel-dollar rate higher. Moving above Nis 3.90/$ is likely to stoke the upward momentum."
Published by Globes [online], Israel business news - www.globes-online.com - on June 27, 2016
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