The shekel is strengthening today against the dollar and against the euro. In late morning inter-bank trading, the shekel-dollar exchange rate is down 0.26% against the dollar at NIS 3.681/$ and down 1.02% against the euro at 4.171/€.
Yesterday, the Bank of Israel set the shekel-dollar representative rate down 0.485% at NIS 3.691/$ from Monday's rate and set the shekel-euro rate down 0.260% at 4.214/€.
The shekel is again strengthening as concerns about the Turkish lira have been soothed by the currency's strong rebound. Other emerging economy currencies have also been hit hard by the crisis, most notably the Indian rupee and the South African rand. However, it seems that investors view the shekel as the currency of a strong developed economy rather than an emerging market.
Meanwhile Russia, China and other countries are reportedly trying to hurt the dollar by initiating trade for oil, gas and other commodities in currencies other than the dollar.
In Israel, the shekel has been strengthened by the restoration of relative quiet along the Gaza border amid reports that Prime Minister Benjamin Netanyahu met in secret with Egyptian President Abdel Fattah el-Sisi to promote an extended ceasefire between Israel and Hamas.
Later today, the Central Bureau of Statistics will announce the consumer price index (CPI) for July. If the trend of recent months continues, with inflation rising towards the government target range of 1%-3%, then the Bank of Israel will be likely to raise interest rates in the coming months above the historical low of 0.1%, where it has been rooted since March 2015.
Published by Globes [online], Israel business news - www.globes-online.com - on August 15, 2018
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