The shekel has weakened against the dollar and euro in morning inter-bank trading today. The shekel-dollar exchange rate has risen 0.69%, compared with Friday's representative rate, to NIS 3.522/$, after the Bank of Israel bought tens of millions of dollars on Friday. The central bank is estimated to have bought some $500 million in total last week. The shekel-euro exchange rate has risen 0.17% to NIS 4.7467/€.
In international markets, the dollar is unchanged against the euro at $1.348/€.
Asian stock markets fell sharply today. The Nikkei fell by 1.98%, after losses on Wall Street on Friday, and amid worries of a crisis in emerging markets, following the US Federal Reserve's decision to continue tapering its quantitative easing. Futures contracts point to a flat opening on Wall Street today.
FXCM Israel says this morning, "Emerging markets will be a powder keg in the global financial markets in 2014." According to FXCM, "The depreciation of emerging market currencies will continue, in line with the continuation of the Fed's tapering policy, which is causing foreign capital flight away from emerging markets back to the US, Europe, and Japan."
This afternoon, FXCM said, "The shekel-dollar exchange rate broke through upwards, in line with the strengthening of the dollar in international markets, and the well-timed intervention by the Bank of Israel last week. When the level of risk rises, demand for the dollar, which is a sounder and safer assets, also rises. Further falls in the capital market and instability in emerging markets should further boost demand for the dollar, and strengthen it against the shekel, too."
Published by Globes [online], Israel business news - www.globes-online.com - on February 3, 2014
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