The shekel is weakening against the dollar, and flat against the euro in inter-bank trading today. The shekel-dollar rate is up 0.18% at NIS 3.845/$, and the shekel-euro rate is down 0.06% at NIS 4.81/€. Yesterday, the Bank of Israel set the shekel-dollar representative exchange rate at NIS 3.838/$, down 0.078% on Tuesday's rate, and set the shekel-euro representative exchange rate at NIS 4.813/€, up 0.198%.
FXCM Israel Research Department said this morning, "The shekel-dollar rate is moving around the NIS 3.845/$ mark with the momentum of the last few days somewhat halted. We also see lower fluctuation in global markets in the past few days, after the minutes published yesterday from the US Federal Reserve Bank's last meeting cooled interest rate expectations regarding the dollar."
FXCM Israel added, "The calming down of the security situation in Israel over the past day has also somewhat helped to moderate the weakening of the shekel. The local market now awaits the interest rate decision next week by the Bank of Israel with speculation growing in recent weeks that the bank will begin quantitative expansion, which will further weigh on shekel trading. Quantitative expansion will further accelerate the depreciation of the shekel because it will require printing money and flooding the market with local currency.
"However, even though the announcement by the Bank of Israel last month hinted at this possibility, the likelihood that the will begin this unprecedented policy is not high. But while the possibility is on the agenda, it is weighing on the shekel."
Published by Globes [online], Israel business news - www.globes-online.com - on November 20, 2014
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