The shekel is mixed against the major currencies this morning. The shekel-dollar exchange rate is currently down 0.33% in comparison with Friday's representative rate, at NIS 3.8124/$, and the shekel-euro rate is up 0.44%, at NIS 4.1993/€.
On world markets, the dollar has weakened against the euro and is currently traded at about $1.10/€. Last week, the euro strengthened by 1.4% against the dollar, after losing about 5% since mid-June because of the crisis in Greece and expectations of an interest rate hike in the US.
The Bank of Israel is due to announce its interest rate decision for August at 16:00 today. Most analysts see the central bank leaving its rate unchanged.
FXCM Israel comments in its market survey this morning, "Despite the appreciation of the shekel against the US dollar and the euro, the Bank of Israel can be expected to leave its interest rate unchanged today at 0.1%. The Bank of Israel appears to have exhausted the effectiveness of the conventional tools at its disposal, and we would have to see a substantial deterioration in the local economy or in global conditions before it used non-conventional tools a negative interest rate or quantitative easing. In the longer term, the expectation of a widening of the interest rate gap between the shekel and the dollar should lead to a rise in the shekel-dollar exchange rate, and so there is no compelling reason for an aggressive move to weaken the shekel.
At the technical level, a rise in the shekel-dollar rate above NIS 3.83/$ will pave the way to NIS 3.85/$. A fall below the NIS 3.80/$ threshold could upset the trend, and cause many investors to take up a waiting position again."
Published by Globes [online], Israel business news - www.globes-online.com - on July 27, 2015
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