Shekel gains on dollar despite BoI $300m buy

Shekels Photo: Shutterstock

FXCM Israel: On the last two occasions that the Bank of Israel intervened, it did not succeed in holding back the shekel.

The shekel is strengthening against the dollar but weakening against the euro today. In afternoon inter-bank trading, the shekel-dollar exchange rate was down 0.19% from yesterday's representative rate at NIS 3.612/$, and up 0.24% against the euro at 3.90/€. The shekel is stronger against the dollar even though the Bank of Israel bought $300 million in foreign currency yesterday afternoon after the representative rate was set.

Yesterday, the Bank of Israel set the shekel-dollar representative rate down 0.303% compared with Friday's rate at NIS 3.619/$, and the representative shekel-euro rate was set down 0.486% at NIS 3.891/€.

FXCM Israel said in its daily review this morning, "After the shekel-dollar exchange rate fell to NIS 3.61/$ yesterday, the Bank of Israel again intervened in trading to buy about $300 million in foreign currency. The intervention pushed the rate above NIS 3.62/$ for a while but the effect was modest and we now see that impact fading away. On both the last two occasions that the Bank of Israel intervened, it did not succeed in slowing the trend and the fall continued after a short respite. It seems that without a change in the circumstances of the dollar on global markets, where the dollar index is at a 6 year low, the Bank of Israel will be unable to change the shekel-dollar trend by itself."

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

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

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Shekels Photo: Shutterstock
Shekels Photo: Shutterstock
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