The shekel is mixed against the major currencies this morning. The shekel-dollar exchange rate is currently down 1.43% in comparison with last Thursday's representative rate (the Bank of Israel set no new representative rateson Friday because of the Passover holiday), at NIS 3.7475/$, while the shekel-euro rate is up 0.54%, at NIS 4.2948/€.
Prico Group CEO Yossi Fraiman writes in his market review this morning, "The weakness of the US dollar against the major currencies, particularly the Japanese yen, the euro, and the pound sterling, indicates substantial potential for appreciation of the shekel against the dollar. The sharp fall in the dollar index (DXY) from peak levels of around 100 points to below 93 points (last year's low was around 92.5 points), indicates weakness in the dollar and demands extra caution. The strengthening of the currencies that represent 74% of the basket of currencies from which is derived the nominal effective shekel exchange rate (the dollar's weighting in this basket is only 26%), means an improvement in Israeli industry's terms of trade and easing of the pressure on the Bank of Israel to intervene in foreign exchange trading,
"For exporters and other exposed to the shekel-dollar exchange rate, the drop in the dollar index requires them to exercise caution, as the Bank of Israel may choose not to intervene in trading and to let the shekel-dollar rate to weaken to below the NIS 3.70 level for the first time in over eighteen months.
"In our view, the Bank of Israel will continue to buy dollars in limited amounts as part of the program for offsetting the effect of natural gas on the exchange rate."
Published by Globes [online], Israel business news - www.globes-online.com - on May 2, 2016
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