Even though the Fed is expected to raise US interest rates by 25 basis points today to 3%-3.25%, the shekel is gaining ground.
The shekel is strengthening today against the dollar and stable against the euro. In late morning inter-bank trading, the shekel-dollar exchange rate is down 0.21% against the dollar at NIS 3.575/$ and unchanged against the euro at 4.210/€.
Yesterday, the Bank of Israel set the shekel-dollar representative rate up 0.252% at NIS 3.582/$ from Friday's rate and set the shekel-euro rate down 0.021% at 4.21/€.
The shekel is stronger today against the dollar, despite expectations that the US Federal Reserve will announce another interest rate hike later today. This will be the eighth such hike since 2015 during which time the Bank of Israel has kept the interest rate at its historic low of 0.1%. So even though the Fed will likely hike the rate by 25 basis points to 2%-2.25%, widening the interest rate gap between the dollar and the shekel, the Israeli currency remains robust, reflecting the strength of the Israeli economy.
Published by Globes [online], Israel business news - www.globes-online.com - on September 26, 2018
© Copyright of Globes Publisher Itonut (1983) Ltd. 2018
Shekel Photo: ASAP Creative