The shekel is strengthening against the dollar and strengthening against the euro in inter-bank trading today. The shekel-dollar exchange rate is trading down 0.51% at NIS 3.967/$ and the shekel is trading down 0.49% against the euro at NIS 4.430/€.
Yesterday, the Bank of Israel set the shekel-dollar representative exchange rate at NIS 3.987/$, up 0.025% on Monday's rate, and set the shekel-euro representative exchange rate at NIS 4.452/€, down 0.581%.
FXCM Israel Research Department said this morning, "Despite the strong upward momentum of the past few days, the shekel-dollar exchange rate did not succeed yesterday in breaking through the psychological NIS 4/$ barrier and retreated somewhat to NIS 3.97/$. Following a sharp rise last week, when the exchange rate rose more than NIS 0.15, after the Bank of Israel lowered the interest rate, this slight retreat was to be expected with some speculators preferring to realize some profits before the next breakthrough."
FXCM added, "On the face of it, nothing has changed in the balance of strength between the two currencies after the Bank of Israel lowering the interest rate widened the interest gap between the shekel and the dollar, and illustrated the difference between the monetary policies currently being taken by the two central banks. After several failed attempts in the past few months to break through the NIS 4/$ threshold, this time there is we see a high likelihood that there will be a breakthrough. The current retreat may be a good opportunity for more traders to join the flow before a major breakthrough. The weakening of the dollar worldwide over the past day or two, and the low volatility in global foreign currency markets, has also cooled off the momentum in Israel's foreign currency market. What may tilt the balance is US employment data, which will be published on Friday. Positive figures will push up dollar interest rate expectations and provide a further incentive for traders to buy dollars and sell shekels."
Published by Globes [online], Israel business news - www.globes-online.com - on March 4, 2015
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