Shekel weaker against dollar with BoI rate call due

shekel  picture: Tamar Mitzpi
shekel picture: Tamar Mitzpi

Several analysts see the Bank of Israel announcing a further interest rate cut today.

The shekel continues to weaken against the US dollar. The shekel-dollar exchange rate is currently up 0.22% in comparison with Friday's representative rate, at NIS 3.651/$. Against the euro, the shekel has strengthened slightly this morning, with the exchange rate down 0.06%, at NIS 4.6946/$.

The Bank of Israel is due to announce its interest rate decision for October this afternoon. Several analysts believe that the central bank will again cut its lending rate, by 0.1%, to a new record low of 0.15%. Goldman Sachs forecasts that by the end of the year the rate will reach 0.05%. Psagot estimates that there is a 25% chance of a further interest rate cut today.

FXCM Israel says in its market review this morning, "The shekel-dollar exchange rate has risen for the seventh successive week, and is trying to consolidate above the key level of NIS 3.65/$. The pair is getting close to NIS 3.67/$. This level represents one third of the fall from the July 2012 peak of NIS 4.1/$ to the low of NIS 3.4/$ in July-August 2014. This was also the level of the double peak in the summer of 2013, which signaled the start of the sharp fall that took place in the following months. It will therefore be interesting to see how the market will respond to this significant resistance level."

Published by Globes [online], Israel business news - www.globes-online.com - on September 22, 2014

© Copyright of Globes Publisher Itonut (1983) Ltd. 2014

shekel  picture: Tamar Mitzpi
shekel picture: Tamar Mitzpi
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