The shekel has lost 2% against the euro and 1.5% against the dollar since last Friday's unexpected 0.7% fall in the CPI.
The shekel has rebounded strongly in volatile foreign currency trading in Tel Aviv after sharply depreciating over the past week. In morning inter-bank trading, the shekel-dollar exchange rate was down 0.71% at NIS 3.563/$ and down 0.65% against the euro at NIS 4.112/€.
Yesterday, the Bank of Israel set the shekel-dollar representative rate up 0.645% at NIS 3.588/$ from Tuesday's rate and set the shekel-euro rate up 0.503% at 4.139/€.
The Israeli currency halted its recent slide today. The latest depreciation of the shekel began last Friday after publication of the unexpected 0.7% fall in the June Consumer Price Index and since then the Israeli currency lost 2% against the euro and 1.5% against the dollar. Traders feared that the lower than expected inflation will deter the Bank of Israel from the two interest rate hikes it said it would likely make next year. Ongoing investigations against Prime Minister Benjamin Netanyahu, geopolitical tensions focused on the Temple Mount and a large dollar bond issued by Tamar Petroleum on the Tel Aviv Stock Exchange were all cited as other factors weakening the shekel.
The shekel's slide seems to have halted for the time being although the shekel still remains close to four year lows against the dollar and all-time lows against the euro.
Published by Globes [online], Israel business news - www.globes-online.com - on July 20, 2017
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