The shekel was strengthening today against the dollar and against the euro despite the Bank of Israel decision to cut the 2016 growth forecast from 2.8% to 2.4% and leave the July interest rate unchanged at 0.1%. The strengthening of the shekel against the dollar also ends the trend which began on Friday after the UK voted to leave the EU and has seen the US currency gain more than 2% against the Israeli currency.
In early afternoon inter-bank trading, the shekel was down 0.75% against the dollar from yesterday's representative rate at NIS 3.871/$ while it was down 0.10% against the euro at NIS 4.287/€. Yesterday, the Bank of Israel set the shekel-dollar representative rate up 0.386% today compared with Friday's rate at NIS 3.900/$, and the representative shekel-euro rate was set down 0.637% at NIS 4.291/€. The shekel strengthened against sterling by a further 3.558% with the rate falling to NIS 5.15/£, meaning sterling has lost 9.8% against the shekel since Thursday.
FXCM Israel said today, "The shekel-dollar has been continuing to push up to and above NIS 3.88/$ but we are still talking about movement within the NIS 3.80-90/$ band and only breaking above and closing above NIS 3.90/$ will have any major technical influence."
"At yesterday's interest rate decision meeting, Bank of Israel Governor Dr. Karnit Flug tried to express confidence in the Israeli economy but cutting the growth and inflation forecast and postponing the date for normalizing interest rates testify to the domestic and global risks weighing on the Israeli economy and the shekel."
Published by Globes [online], Israel business news - www.globes-online.com - on June 28, 2016
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