The Bank of Israel, led by Governor of the Bank of Israel Prof. Stanley Fischer, bought $700 million beginning this morning, apparently when the exchange rate dipped to as low as NIS 3.562/$. After the move, the shekel weakened against the dollar, with the exchange rate moving closer to NIS 3.6/$. The representative exchange rate was set at NIS 3.591/$ down 0.28% from Thursday.
Foreign banks were major sellers of dollars today, with traders telling "Globes" that the biggest sellers were JP Morgan, Deutsche Bank, and Barclays.
Yesterday, the shekel-dollar exchange rate fell below NIS 3.6/$ for the first time in two years. The representative rate on October 10, 2008, was set at NIS 3.595/$.
The shekel-dollar exchange rate is down 0.29% to NIS 3.5905/$, and the shekel-euro representative exchange rate was up 0.92% to NIS 5.024/€.
In contrast to the movement against the dollar, the shekel is sharply weaker against the euro, ahead of an European Central Bank (ECB) interest rate decision announcement. The interest rate in Europe is expected to remain unchanged at 1%. Clal Forex said that it is possible that the euro will face selling pressure if ECB president Jean-Claude Trichet focuses on Europe's economic problems, but that a more optimistic-sounding talk can push the euro above the psychologically significant $1.4 level.
In the UK, the Bank of England is also expected to announce its monetary policy decision later today.
Published by Globes [online], Israel business news - www.globes-online.com - on October 7, 2010
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