FXCM Israel: The dollar is in a very vulnerable position.
The shekel is strengthening against the dollar and against the euro. In early afternoon inter-bank trading, the shekel-dollar exchange rate was down 0.23% from yesterday's representative rate at NIS 3.789/$, and down 0.17% against the euro at NIS 4.069/€.
Yesterday, the Bank of Israel set the shekel-dollar representative rate down 0.341% today compared with Friday's rate at NIS 3.798/$, and the representative shekel-euro rate was set up 0.493% at NIS 4.052/€. Immediately after setting the exchange rate the Bank of Israel Monetary Committee announced, as expected, that the February interest rate would remain unchanged at 0.1%.
FXCM Israel said this morning, "Trump's first days in office continue to make waves and the global dollar index has fallen to a 7-week low. The shekel-dollar exchange rate has fallen to NIS 3.78/$, its lowest rate since early December. Trump's decision to pull out of the Trans Pacific Partnership and his declarations of renegotiating NAFTA have increased concerns that Trump's policies will damage US trade policies and harm the US economy and lead to a wave of protectionism worldwide in response. On the other hand, it is hard to see what steps Trump will take to encourage growth in the US as he promised. This uncertainty begins to raise questions about the ability of the US Fed to raise interest rates three times in 2017, as promised. It looks as though the dollar is in a very vulnerable position."
Published by Globes [online], Israel business news - www.globes-online.com - on January 24, 2017
© Copyright of Globes Publisher Itonut (1983) Ltd. 2017
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