The shekel-dollar rate dipped below 3.80 at the start of trading this morning.
The Bank of Israel stepped in to stop the shekel strengthening this morning. The shekel strengthened against the dollar to a rate below NIS 3.80/$ in early inter-bank trading, but the trend changed as the session wore on. By late morning, the shekel-dollar exchange rate was up 0.5% on yesterday's representative rate at NIS 3.83/$. After an early fall, the shekel-euro exchange turned around and was up 1% to NIS 5.414/€. Foreign exchange market players estimate that the Bank of Israel bought dollars to the tune of $100-200 million, and acted to weaken the shekel against the entire basket of currencies..
Falls in stock markets around the world are strengthening the dollar against leading currencies, as investors' appetite for risk falls and they return to invest in dollar-linked instruments.
Online foreign exchange brokerEasy Forex says that the strengthening of the dollar on international markets set the tone on the local market. Economically, the unexpectedly strong second quarter growth figures for Israel, as well as the high inflation, are supporting the shekel. However, the Bank of Israel has already shown that a sharp fall in the shekel-dollar exchange rate could lead to another intervention in the foreign currency market.
Published by Globes [online], Israel business news - www.globes-online.com - on August 18, 2009
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