The shekel continued to weaken against the dollar and the euro in morning interbank trading today. The shekel-dollar exchange rate was up 0.44% in comparison with yesterday's representative rate, at NIS 3.625/$, and the shekel-euro rate was up 0.74%, at NIS 4.688/€.
Yesterday, the Bank of Israel set the shekel-dollar representative exchange rate at NIS 3.609/$, up 0.25% on Monday's rate, and set the shekel-euro representative exchange rate at NIS 4.654/€, down 0.169%.
FXCM Israel research department said, "The shekel-dollar exchange rate has made another push upwards. The reasons for the rise stem primarily from the strengthening of the dollar on world markets with the dollar index at its highest point for 14 months. What has strengthened the dollar in recent days was again the pricing of an approaching interest rate hike following a survey by the Federal Reserve Bank in San Francisco yesterday, which hinted that investors might be mistaken in their estimation of the expected interest rate hike date, and it could be earlier than the market expects. The weakness of European currencies, sterling and the euro, has also contributed to the dollar's strength.
FXCM added, "At a technical level, indicators show us a situation of overbuying after the shekel-dollar rate has climbed more than NIS 0.23 from the low point. However, market factors support the momentum of a continued rise in the exchange rate. The next resistance level is NIS 3.65/$. A fall below NIS 3.6/$ could bring about a correction.
Prico CEO Yossi Fraiman said, "The sharp movement of exchange rates is nearing the phase for a correction of exchange rates as part of the pro-dollar trend leaving shekel-dollar movement within the NIS 3.58/$ to NIS 3.66/$ range."
Published by Globes [online], Israel business news - www.globes-online.com - on September 10, 2014
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