The shekel has strengthened against the major currencies this morning. After rising above NIS 4/$ yesterday, the shekel-dollar exchange rate has fallen back 0.4% in comparison with yesterday's representative rate, to NIS 3.9981/$, and the shekel-euro rate is down 0.32%, at NIS 4.2124/€.
FXCM Israel says in its market review this morning, "The shekel-dollar pair opened the trading week with a storm, rising intraday yesterday to a peak of NIS 4.025/$, but by the end of the day it had fallen back below NIS 4/$, and so, from a technical point of view, there was no breakthrough. If the pair ends the day above NIS 4/$, this will encourage speculators to believe that it is a matter of a genuine breakthrough, and they could push the pair towards the resistance levels at NIS 4.03/$ and NIS 4.05/$.
"Locally, the release of the March CPI reading this week could be a trigger for such a breakthrough. A low reading, indicating continued deflationary pressures, will weigh heavily on the shekel and push the shekel-dollar pair higher, since stronger deflation will boost speculation about a further interest rate and even a quantitative easing program by the Bank of Israel."
Prico says this morning, "The demand for the dollar being injected by the institutions, which continue to channel foreign currency into global investments, is contributing towards a depreciation of the shekel, but counter activity by exporters, exploiting the exchange rates above NIS 4/$ to sell dollars and hedge their currency exposures, is putting the brakes on depreciation. Current exchange rates are attractive for exporters seeing to convert currency in advance of tax payments due this week. In our view, it will take some extraordinary event to support a breakthrough of the NIS 4.04/$ level and enable the shekel-dollar rate to rise towards new peaks. In the short term, the rate can be expected to continue to move within the NIS 3.8-4.2/$ range."
Published by Globes [online], Israel business news - www.globes-online.com - on April 14, 2015
© Copyright of Globes Publisher Itonut (1983) Ltd. 2015