The shekel is again weakening in inter-bank trading this morning against the dollar and against the euro. The shekel-dollar exchange rate is up 0.09% at NIS 3.944/$ compared with yesterday's representative rate, and the shekel-euro rate is up 0.29% at NIS 4.2503/€.
Yesterday, the Bank of Israel set the shekel-dollar representative rate up 0.331% from Tuesday's rate at NIS 3.941/$, and the representative shekel-euro rate down 0.201% at NIS 4.238/€.
FXCM Israel said in its morning survey, "The shekel-dollar exchange rate continues to push upwards above the NIS 3.95 threshold to its highest level since September 2015. The dollar has succeeded in strengthening despite a range of disappointing macroeconomic data published yesterday in the US including factory orders, durable product orders and the ISM services survey. This negative cluster of reports has somewhat cooled interest rate expectations although Fed deputy chairman Stanley Fischer hinted yesterday that he believes the Fed will raise interest rates by 1% in 2016, which would support continued strengthening of the dollar."
"However, the focus of investors over the past few days has been less on the situation in the US and more on China's woes and the geopolitical situations in the Middle East and North Korea. The markets' anxiety levels are high and demand is high for more solid assets including the dollar and so we see the dollar appreciating against most currencies, except the yen. When the situation stabilizes, it may well be that the markets will return to pricing interest on the dollar and then the negative indications that can be identified in macroeconomic trends in the US may weigh on the dollar. The shekel-dollar exchange rate will continue to break barriers that have restricted it in the past few months. Consolidating its position above NIS 3.95/$ will pave the way towards the key psychological level of NIS 4/$.
Published by Globes [online], Israel business news - www.globes-online.com - on January 7, 2016
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