The shekel is strengthening against the dollar and against the euro today after the Bank of Israel yesterday kept the interest rate for March at its historic low of 0.1% for the 25th straight month. In late morning inter-bank trading, the shekel-dollar exchange rate was down 0.38% from yesterday's representative rate at NIS 3.665/$, a new 30 month low, and down 0.35% against the euro at 3.881/€, a new 15-year low.
Yesterday, the Bank of Israel set the shekel-dollar representative rate down 0.514% compared with Friday's rate at NIS 3.679/$, and the representative shekel-euro rate was set down 0.615% at NIS 3.894//€.
Many expect the Bank of Israel to intervene and purchase foreign currency to weaken the shekel and help exporters as it has been doing in recent years. However, many analysts believe that even this is not enough and the Bank of Israel is powerless to prevent the strengthening of the shekel.
FXCM Israel said in its daily review this morning, "The shekel-dollar exchange rate continues to break new negative records and has fallen to the NIS 3.665/$ region, its lowest level since October 2014. President Trump is expected to talk today about the US economy and there is concern that he will not present, as he promised in the elections, a plan for cutting corporation tax. According to the US Secretary of the Treasury, the tax reform program won't be ready until the second half of 2017 and that's a disappointment. This is also likely to change the US growth forecast of 3% for 2017."
Published by Globes [online], Israel business news - www.globes-online.com - on February 28, 2017
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