The shekel was weakening in morning inter-bank trading today against the dollar and the euro. The shekel-dollar exchange rate is up 0.28% at NIS 3.966/$ compared with yesterday's representative rate, and the shekel-euro rate is up 0.16% at NIS 4.324/€. The dollar is strengthening against the shekel despite weakening against major global currencies.
Yesterday, the Bank of Israel set the shekel-dollar representative rate unchanged from yesterday's rate at NIS 3.955/$, and the representative shekel-euro rate up 0.463% at NIS 4.317/€.
FXCM Israel said in its morning survey, "The shekel-dollar exchange rate continues to read water for the third straight day in the NIS 3.95-3.96/$ range, despite the fall of the dollar on world markets. It would seem that on the local foreign currency trading market other factors are offsetting global trends, and we see flat trading."
"On the one hand, the dollar has lost its strength worldwide because of a loathing for risk and the fall in interest rate expectations. On the other hand, traders prefer in these circumstances to abstain from excessive exposure to the shekel, which is considered an exotic and more volatile currency. On world markets, we continue to see the dollar damaged by the fall in oil prices, which not only creates an atmosphere of concern on the capital markets, but also low oil prices are expected to curb inflation in the US because energy prices are a major component in the level of prices in the economy. The US Fed too, in its most recent meeting, expressed concern about low inflation in the coming period and so the market is now pricing in just one interest rate hike in 2016, and not four as previously thought."
Published by Globes [online], Israel business news - www.globes-online.com - on February 3, 2016
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