Shekel appreciation gains momentum

Shekels Photo: Shutterstock
Shekels Photo: Shutterstock

The shekel has pushed the dollar below NIS 3.70/$ and the euro below NIS 3.90/€.

The shekel is strengthening against the dollar and against the euro today. In afternoon inter-bank trading, the shekel-dollar exchange rate was down 0.30% from yesterday's representative rate at NIS 3.696/$, a 30 month low, and down 1.08% against the euro at 3.897/€, a 15-year low. The Bank of Israel is expected to intervene and weaken the shekel by purchasing foreign currency.

Yesterday, the Bank of Israel set the shekel-dollar representative rate down 0.242% compared with Friday's rate at NIS 3.707/$, and the representative shekel-euro rate was set down 0.437% at NIS 3.9397/€.

FXCM Israel said in its daily review this morning, "The shekel-dollar exchange rate is still exposed to continued falls and is at its lowest level since October 2014 and it may be that the two currencies will bottom out at this psychological level. Such a low level poses a problem for Israel's economy because it harms the competitiveness of Israeli exporters. The Bank of Israel has intervened in trading in recent weeks and will possibly be required to intervene again to halt the downward slide.

Excellence Investments Ltd. (TASE: EXCE) research chief Yaniv Hevron does see the shekel weakening in the longer term. "In a couple of more months the expectations are that the interest rate gaps between Israel and the US and Europe will open up more and that could halt the huge appreciation of the shekel and even turn things around completely."

Published by Globes [online], Israel business news - www.globes-online.com - on February 21, 2017

© Copyright of Globes Publisher Itonut (1983) Ltd. 2017

Shekels Photo: Shutterstock
Shekels Photo: Shutterstock
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