The shekel is strengthening today against both the dollar and the euro. In late morning inter-bank trading the shekel-dollar exchange rate is down 0.64% against the dollar at NIS 3.422/$ and down 0.40% against the euro at NIS 4.234/€.
Yesterday, the Bank of Israel set the shekel-dollar representative rate up 0.116% from Monday's exchange rate at NIS 3.444/$ and set the shekel-euro rate up 0.511% at 4.251/€.
The dollar is weakening worldwide following the surprise firing of US Secretary of State for Foreign Affairs Rex Tillerson and concerns about a trade war after the US imposed import tariffs on steel and aluminum. Tame inflation figures, which reflect subdued economic activity in the US support less rather than more interest rate hikes this year. The Fed has spoken of three rate hikes in 2018.
The euro has not been able to take advantage of the dollar's weakness after ECB chief Mario Draghi said he was in no hurry to change bond buying policies and urged patience.
The shekel has been boosted by a resolution to the government coalition crisis and economists await tomorrow's Consumer Price Index figure for February to see if inflation is indeed moving up towards the government target range of 1%-3% - a development that would set the scene for interest rate hikes by the Bank of Israel later this year.
The shekel has now been trading consistently below NIS 3.50/$ for most of the time since December 2017.
Published by Globes [online], Israel business news - www.globes-online.com - on March 14, 2018
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