Fed boosts shekel against dollar

Shekels Photo: Shutterstock

FXCM Israel: The Fed has cut its growth forecast, lowering rate hike expectations this year.

The shekel is strengthening today against the dollar and weakening against the euro after the US Federal Reserve yesterday decided to keep the interest rate unchanged. In morning inter-bank trading, the shekel was down 0.58% against the dollar from yesterday's representative rate at NIS 3.756/$, and was up 0.24% against the euro at NIS 4.221/€.

Yesterday, the Bank of Israel set the shekel-dollar representative rate up 0.053% from Tuesday's rate at NIS 3.778/$, and the representative shekel-euro rate was set down 0.301% at NIS 4.211/€.

FXCM Israel said in its morning survey, "The shekel-dollar exchange rate fell below NIS 3.77/$ after the US Federal Reserve, as expected, yesterday kept the interest rate unchanged. What is weighing on the dollar, worldwide and against the shekel, were the contradictory messages received from the Fed meeting. In the general statement, the Fed expressed support for the US economic situation, strengthening the belief that the Fed will indeed raise the interest rates in December. However, the full report that was published indicated major difference of opinion between the Fed's board members with some speaking about interest rates rising in a gradual and planned manner but three members even saying they don't expect a rate hike in 2016. The Fed also lowered its growth and inflation forecasts, which has tempered interest rate hike expectations."

"Regarding the shekel-dollar exchange rate, NIS 3.75/$ is an important resistance point. Breaking below that is likely to speed up the strengthening of the shekel against the dollar."

Published by Globes [online], Israel business news - www.globes-online.com - on September 22, 2016

© Copyright of Globes Publisher Itonut (1983) Ltd. 2016

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Shekels Photo: Shutterstock
Shekels Photo: Shutterstock
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