"Mobileye effect" further strengthens shekel

Shekels Photo: Shutterstock

FXCM: The Mobileye-Intel deal is likely to attract more investors to Israel, boosting the local currency.

The shekel has strengthened against the major currencies this morning. The shekel-dollar exchange rate is currently down 0.45% in comparison with yesterday's representative rate, at NIS 3.6615/$, and the shekel-euro rate is down 0.07%, at NIS 3.8986/€.

FXCM Israel says in its market review this morning, "The dollar-shekel pair retreated yesterday, dipping below NIS 3.66/$, despite the US dollar's stability on world markets in advance of the US Federal Reserve's interest rate decision on Wednesday. It is possible that the relative strength of the shekel is a manifestation of the "Mobileye effect", which elevated the mood on the local market."

It was announced yesterday that Israeli car automation technology company Mobileye (MBLY) is being sold to Intel for $15 billion, in the biggest ever acquisition of an Israeli company.

FXCM continued, "The State of Israel is expected, according to estimates, to gain a tax windfall of some $1 billion as a result of the deal. Moreover, the deal attracted worldwide publicity, which is likely to attract more investors to the Israeli market, further strengthening the shekel. Added to this is the announcement by Prime Minister Benjamin Netanyahu and Minister of Finance Moshe Kahlon that they intend to cut taxes, which will stimulate growth and boost investors' confidence in the local economy."

Published by Globes [online], Israel business news - www.globes-online.com - on March 14, 2017

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

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Shekels Photo: Shutterstock
Shekels Photo: Shutterstock
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