FXCM Israel: The polls indicate a victory for the Brexit campaign and this would cause panic in the markets.
The shekel was strengthening in early afternoon inter-bank trading against the dollar and against the euro. The shekel-dollar exchange rate is up 0.16% at NIS 3.868/$ compared with yesterday's representative rate, and the shekel-euro rate is up 0.65% at NIS 4.339/€.
Yesterday, the Bank of Israel set the shekel-dollar representative rate up 0.650% from Friday's rate at NIS 3.874/$, and the representative shekel-euro rate up 0.437% at NIS 4.367/€.
FXCM Israel said in its morning survey, "The shekel-dollar exchange rate continues being traded around the NIS 3.85/$ mark ahead of key events this week (interest rate decisions in the US and Japan) and next week's EU exit referendum in the UK. The dollar has strengthened against all the world's major currencies except sterling. The dollar is weakened by expectations that the US Federal Reserve won't raise interest rates at its meeting this week. The Us currency began to weaken 11 days ago after the publication of disappointing job figures and the market now awaits how that will impact the US Fed's thinking on interest rates over the next few months. The market hates uncertainty and investors are acting cautiously ahead of the UK referendum and reducing their exposure to risky assets, especially with the latest polls showing that supporters of a Brexit are leading. In the short term such a vote would cause panic in the markets and a dangerous tailspin. Safe haven currencies such as the Japanese yen have climbed to a three month high against the euro and sterling.
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