The shekel is stable today against the dollar and strengthening against the euro amid the growing belief that the US Federal Reserve will raise interest rates in December. In late morning inter-bank trading, the shekel was up 0.10% against the dollar from yesterday's representative rate at NIS 3.872/$, and was down 0.50% against the euro at NIS 4.088/€.
Yesterday, the Bank of Israel set the shekel-dollar representative rate up 0.052% compared with Tuesday's rate at NIS 3.868/$, and the representative shekel-euro rate was set up 0.058% at NIS 4.108/€.
FXCM Israel said in its morning survey, "After a two-day correction, the shekel-dollar exchange rate is again climbing to the NIS 3.87/$ level on growing expectations that the US Federal Reserve will raise the interest rate at its next meeting in December. Worldwide, the dollar index is close to 102, its highest level since April 2003, following positive US macroeconomic data published in recent days (durable goods orders rose 0.4%) and the minutes of the last Fed meeting showing support for the expected rate hike. The market has priced in an almost 100% probability of a hike. The dollar is also strong because the market expects more rate hikes in 2017 as president trump embarks upon an economic policy that is expected to raise inflation, forcing the Fed to raise interest faster than planned."
"In contrast, the euro continues to slide ahead of a referendum in Italy on the national constitution, and next year's French presidential elections, and concern's that Trump's victory will boost nationalist forces and EU opposition in key European countries."
"On a technical level, the major shekel-dollar resistance point is NIS 3.88/$, which the exchange rate has so far failed to break above. Doing so will pave the wave to the more significant NIS 3.90/$ threshold."
Published by Globes [online], Israel business news - www.globes-online.com - on November 24, 2016
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