Shekel strengthens against dollar

Shekels Photo: Shutterstock
Shekels Photo: Shutterstock

FXCM Israel: The dollar has weakened because of fears of an isolationist US under President Trump.

The shekel is mixed the major currencies this morning. The shekel-dollar exchange rate is currently down 0.45% in comparison with Friday's representative rate, at NIS 3.794/$, while the shekel-euro rate is up 0.56%, at NIS 4.0789/€.

FXCM Israel says in its market review this morning, "The dollar-shekel pair has broken through below the NIS 3.80/$ level, in the wake of US President Donald Trump's inauguration speech, which aroused fears in the market because of its isolationist tone. The incoming president did declare his intention of expanding government spending in order to rehabilitate infrastructures in the US and increase employment, which is the policy line that caused the dollar to strengthen following his election victory. However, the declaration that he would "put America first" raises fears of protectionist customs duties and trade wars that will undermine the global market, and that cannot be sustained in an era of globalization.

"The widespread demonstrations that accompanied the inauguration and the fact that Trump's speech was dark in tone and not conciliatory in the way expected of a newly elected president also contributed to volatility on the markets. The dollar will probably be on the defensive in the near future because of the uncertainty and fears over Trump's policy. As his policy and conduct as president become clearer, the markets will be able to 'choose sides' more definitely.

"The fall in the shekel-dollar rate below NIS 3.80/$ is likely to speed the decline towards a low in the region of NIS 3.77-3.78/$."

Published by Globes [online], Israel business news - www.globes-online.com - on January 23, 2017

© Copyright of Globes Publisher Itonut (1983) Ltd. 2017

Shekels Photo: Shutterstock
Shekels Photo: Shutterstock
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