Atrade: Speculation that the Bank of Israel might intervene in the market is contributing to the weakening of the shekel against the dollar.
The shekel was flat against the dollar and euro in morning inter-bank trading. At midday, the shekel-dollar exchange rate dipped 0.07%, compared with yesterday's representative rate, to NIS 3.698/$, and the shekel-euro exchange rate dipped 0.05% to NIS 4.951/€.
In international markets, the dollar is traded at $1.339/€ against the euro.
Atrade said today, "The shekel weakened against the dollar yesterday, and the exchange closed at the end of trading day close to the important resistance level of NIS 3.70/$. The strengthening of the dollar in international markets, and speculation that the Bank of Israel might intervene in the market are contributing the weakening of the shekel against the dollar. We believe that if the shekel-dollar exchange rate breaks through NIS 3.71/$, it will rise to NIS 3.74/$, and we do not rule out a rise to NIS 3.80/$. Movement below NIS 3.67/$ could cause the Bank of Israel to intervene."
Prico CEO Yossi Fraiman says, "In the local market, the euro's correction against the yen supports the strengthening of the dollar in the local market. Yesterday, foreign currency supply by exports stemmed the weakening of the shekel at NIS 3.70/$, so that this morning's weakening of the dollar against the euro caused the dollar to weaken against the shekel. As we've said before, we do not expect a sharp appreciation in the short term, because the Bank of Israel would intervene in the market if exchange rates fluctuate sharply. But a real intervention beyond mere words is unlikely at the current levels, and it seems that Stanley Fischer will prefer to emulate European Central Bank President Mario Draghi to make declarations before making massive purchases of dollars. There will be strong supply of foreign currency from exporters at NIS 3.70-3.72/$."
Published by Globes [online], Israel business news - www.globes-online.com - on February 12, 2013
© Copyright of Globes Publisher Itonut (1983) Ltd. 2013
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