Shekel continues to weaken

The shekel continues to weaken against the dollar and against the euro. In morning inter-bank trading, the shekel-dollar exchange rate was up 0.32% at NIS 3.544/$ and up 0.16% against the euro at NIS 3.947/€.

This is the second straight day that the shekel has lost ground against the dollar after reaching a 3-year low against the dollar last week. Yesterday, the Bank of Israel set the shekel-dollar representative rate up 0.369% at NIS 3.533/$ from Monday's rate and set the shekel-euro rate down 0.137% at 3.941/€.

The widening interest rate gap between Israel and the US is finally weighing on the shekel after last week's US Federal Reserve decision to raise interest rates - its fourth hike in the last 18 months. For the time being, the shekel seems to be moving away from the crucial NIS 3.50/$ threshold, without the Bank of Israel needing to intervene in trading to buy foreign currency in order to weaken the shekel and help exporters.

Israel's poor first quarter growth figures, which were revised downwards to just 1.2% has further dampened enthusiasm for the shekel.

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

Shekel continues to weaken

The widening interest rate gap between Israel and the US is weighing on the shekel.