FXCM Israel: The Bank of Israel remains non-commital on quantitative easing.
The morning after the Bank of Israel's decision to leave its interest rate unchanged for December at 0.25%, the shekel is fairly stable against the major currencies. The shekel-dollar rate is currently down 0.14% in comparison with yesterday's representative rate, at NIS 3.8575/$, while the shekel-euro rate is up 0.07%, at NIS 4.7968/€.
Yesterday, the shekel-dollar representative exchange rate shot up 0.8% to NIS 3.864/$, while the shekel-euro rate fell 0.3%, to NIS 4.793/€. The background to yesterday's movements was the downgrading by Fitch of its outlook for Israel's foreign currency rating from Positive to Stable at the weekend. The rating itself remained A.
FXCM Israel comments in its market review this morning that in yesterday's Bank of Israel's interest rate announcement there was no escalation in the rhetoric about a possible quantitative easing program, with the central bank keeping to the non-committal formulation that it would "examine the need for using various tools." FXCM says that the political instability in Israel only adds to the negative sentiment towards the shekel.
Published by Globes [online], Israel business news - www.globes-online.com - on November 25, 2014
© Copyright of Globes Publisher Itonut (1983) Ltd. 2014
shekel picture: bloomberg