The trading week on the foreign exchange market in Israel and around the world in effect got underway this morning. There was no trading on Wall Street yesterday, so that foreign exchange trading was minor (no representative rates were set in Israel). Today, fears of a default by Greece are sending the euro tumbling, with the drama taking place overseas outweighing any effect of yesterday's interest rate decision by the Bank of Israel. The bank kept its rate unchanged at 0.1%.
The shekel-dollar exchange rate is currently up 0.07% in comparison with Friday's representative rate, at NIS 3.8759/$, and the shekel-euro rate is down 2.25%, at NIS 4.2257/€.
Traders are also awaiting economic figures due to be released in the US later this week, such as April consumer goods orders and revised first quarter GDP figures. Every number published in the US at this time has consequences for the timing of the expected interest rate hike by the Federal Reserve, with the general assumption on the market being that rates will start to rise in September.
Speaking in Herzliya yesterday evening, former governor of the Bank of Israel and vice chair of the Federal Reserve Stanley Fischer estimated that within 3-4 years US rates would reach a "normal" level of about 3.5%.
Published by Globes [online], Israel business news - www.globes-online.com - on May 26, 2015
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