The shekel is weakening today against the US dollar and against the euro. In afternoon inter-bank trading, the shekel is 0.83% higher against the dollar at NIS 3.657/$ and 0.89% higher against the euro at 3.869/€.
Yesterday, the Bank of Israel set the representative shekel-dollar rate up 0.028% from Tuesday, at NIS 3.627/$, and the representative shekel-euro rate was set 0.112% lower at NIS 3.964/€.
Mizrahi Tefahot Bank chief economist Ronen Menachem said, "The shekel continues to behave with volatility, reacting to defense and political developments, but without any real direction. As evidence, over the last week the shekel depreciated by 0.6% against the US dollar, but in the last month it has actually strengthened by 1.5% against it. Today's depreciation can be attributed to events such as the shooting attack in Samaria, and reports of Hezbollah's drone images.
"However, to no less extent and perhaps even greater, this is a reaction to the continued decline in the US stock markets, and especially the Nasdaq index, which intensified yesterday. The shekel tends to weaken during such periods due to the need for institutional bodies to convert shekels into dollars to protect the erosion in their assets due to their exposure overseas. In any case, the tension surrounding the imminent deal to bring back the hostages will continue to affect the volatility of the shekel in the short term. The trend in the longer term will largely depend on whether the decline in the US market will continue."
Published by Globes, Israel business news - en.globes.co.il - on July 25, 2024.
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