FXCM: The foreign exchange market is not coming into line with the Bank of Israel.
The shekel has strengthened against the major currencies this morning. The shekel-dollar exchange rate is currently down 0.67% in comparison with Friday's representative rate, at NIS 3.6217/$, and the shekel-euro rate is down 0.05%, at NIS 3.9346/€.
FXCM Israel says in its market review this morning, "After the Bank of Israel intervened in trading three times last week, this week we shall have an opportunity to examine the real effect of this aggressive strategy on the market. In the end, the central bank's move succeeded in raising the exchange rate against the US dollar by less than NIS 0.04 from its recent lows. Nevertheless, the bank's action in likely to create a deterrent effect on the market and make short players think twice about testing the Bank of Israel's patience in an attempt to drive the dollar-shekel pair lower. Still, at the technical level, as long as the pair is below NIS 3.66-3.67/$, the tendency will remain bearish, and for the moment we do not see the market locking step with the Bank of Israel.
"The factor that makes a turnaround difficult is the weakness of the US dollar on world markets. The US currency sustained a further blow with President Donald Trump's failure to pass his healthcare reform bill in Congress. Trump's fall at this hurdle represents a warning sign for investors concerning his ability to get significant initiatives past the US legislature such as far-reaching economic programs involving fiscal incentives."
Published by Globes [online], Israel business news - www.globes-online.com - on March 27, 2017
© Copyright of Globes Publisher Itonut (1983) Ltd. 2017
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