The euro has weakened this morning in Israel and on world markets after Greece's default on a $1.7 billion debt repayment to the International Monetary Fund. Against the shekel, the euro is at a thirteen-year low of NIS 4.1981€, 0.5% below yesterday's representative rate. The last time the shekel-euro rate was below NIS 4.2/€ was in April 2002.
The shekel-dollar rate is currently 0.11% above yesterday's representative rate, at NIS 3.7733/$.
FXCM Israel says in its market review this morning, "Intraday volatility in the shekel-dollar pair is very high, mainly because of the uncertainty created by the crisis in Greece. The markets are now waiting to see what the financial consequences will be for the Greek banking system and banks in the euro zone of the Greek government's failure to make the debt repayment to the IMF. It could be that this dramatic incident will spur all sides to find a solution quickly in order to prevent Greece from leaving the euro zone. The decline of the euro against the US dollar has halted in the past twenty-four hours, but against the shekel, the euro is on the verge of a critical technical breakthrough. A move below NIS 4.2/€ could accelerate the slide.
"It could be that the publication of the agreement between the State of Israel and the gas exploration companies yesterday contributed to positive sentiment towards the Israeli economy and the shekel. Although the agreement has yet to be approved, the government's efforts to push it through are perceived as a positive development for the Israeli economy, contributing to the strength of the shekel. Energy independence is a positive thing for the country. It will mean low energy costs for Israel's people and its industry, while the taxes on the gas will of course enrich the public purse."
Published by Globes [online], Israel business news - www.globes-online.com - on July 1, 2015
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