The shekel-dollar exchange rate continues to climb, and is consolidating above NIS 3.7/$. The rate is currently 0.51% above Friday's representative rate, at NIS 3.7408/$, while the shekel-euro rate is up 0.43%, at NIS 4.7395/€. The shekel-dollar rate is at a peak not seen since early 2013.
FXCM Israel says in its market review this morning, "The shekel-dollar rate has risen for the tenth successive week, reaching a peak of NIS 3.738/$ last week, its highest level since March 2013. Conversely, on world markets, the dollar broke a thirteen-week run and recorded its first negative week since July. It could certainly be that the dip in the dollar on world markets signals the start of a called-for correction, which would mean a similar correction in the shekel-dollar rate.
"No asset can go up uninterruptedly for so long. The continuous and impressive climb by the dollar expresses a substantial change in the trend in the dollar in 2014, and this trend should continue in 2015, when the US Federal Reserve starts to raise interest rates, and in the light of the good growth forecast for the US economy, in contrast to other markets. Still, we expect to see a normalization of movements in the dollar sooner or later, that is to say, a moderate rise punctuated by corrections along the way."
On the shekel, FXCM's concludes, "If we see a continuation of the correction in the dollar on world markets, this will also drag the shekel-dollar rate downwards. A drop below NIS 3.7/$ could accelerate the decline. The other way, the next significant resistance level is at NIS 3.75/$."
Published by Globes [online], Israel business news - www.globes-online.com - on October 13, 2014
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