This morning, the shekel-dollar exchange rate has been hovering around the level of the representative rate set on Friday, of NIS 3.815/$. After opening slightly lower, the shekel-dollar rate is currently just 0.05% above Friday's representative rate, at NIS 3.8168. The shekel-euro rate is 0.28% higher, at NIS 4.7673/€.
FXCM Israel says in its market review today, "The shekel-dollar is oversold, and if we see a correction in the dollar on world markets, this will raise the pressure on speculators in the local foreign exchange market to take profits. If we see a fall below NIS 3.79/$, that will certainly be an initial sign of such a correction. This technical event will certainly spur speculators to take profits. On the other hand, as long as the pair is above the key rate of NIS 3.80/$, the trend is upwards.
"The shekel continued to show weakness against other currencies as well, in a week when the dollar index fell. This gap well illustrates the negative sentiment towards the shekel and the Israeli economy. There is no doubt that the local security tension and the instability of the coalition also weaken confidence in the shekel. The speculation that Governor of the Bank of Israel Karnit Flug might embark on a dramatic and historic move of quantitative easing, weighs heavily on the shekel. We are seeing quantitative easing programs around the world decimate currencies. That's what happened to the US dollar over the years of the Federal Reserve's quantitative easing program, and that is what's happening now to the yen and the euro because of the quantitative easing programs of the central banks in Japan and Europe."
Published by Globes [online], Israel business news - www.globes-online.com - on November 17, 2014
© Copyright of Globes Publisher Itonut (1983) Ltd. 2014