Market sources expect the Bank of Israel to purchase foreign currency to stop the shekel gaining against the dollar.
The shekel is strengthening this morning against the dollar and is flat against the euro. In early afternoon inter-bank trading, the shekel was down 0.39% against the dollar from yesterday's representative rate at NIS 3.766/$, a new three month low, and was down 0.08% against the euro at NIS 4.268/€. The Israeli currency was boosted last week by stronger than expected growth data - 3.7% in the second quarter, and higher than expected inflation the Consumer Price Index rose 0.4% in July.
Yesterday, the Bank of Israel set the shekel-dollar representative rate up 0.265% compared with Friday's rate at NIS 3.781/$, and the representative shekel-euro rate was set down 0.023% at NIS 4.272/€.
Market sources expect the Bank of Israel to purchase foreign currency to stop the shekel gaining against the dollar in order to help exporters. Last week, the shekel-dollar exchange rate broke below the NIS 3.70-3.80/$ trading band in which it has been moving since May.
Published by Globes [online], Israel business news - www.globes-online.com - on August 23, 2016
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