Shekel strengthens against dollar at opening

Shekels Photo: Shutterstock

Despite good US jobs figures and expectations of an interest rate hike, the US dollar has weakened globally and locally.

The shekel is mixed against the major currencies this morning. The shekel-dollar exchange rate is currently down 0.52% in comparison with Friday's representative rate, at NIS 3.6588/$, while the shekel-euro rate is up 0.38%, at NIS 3.9159/€.

FXCM Israel says in its market review this morning, "Despite the positive jobs numbers in the US and the expectations that the US Federal Reserve will hike interest rates at its meeting this month, the dollar-shekel pair has not managed to correct upwards and is traded below NIS 3.67/$. The employment report released in the US on Friday - the first under President Donald Trump – did show 235,000 jobs added, which was more than expected, and a fall in unemployment to 4.7%, but the dollar nevertheless weakened on world markets and locally because of the hourly earnings figures which indicated lower than expected growth (0.2% instead of 0.3%), which in turn lowers inflation projections.

"This week's main event is the meeting of the Federal Open Market Committee in the US. The market is pricing in a 93% probability of an interest rate rise, in the wake of remarks by senior Federal Reserve officials in recent weeks, headed by Federal Reserve chair Janet Yellen, and the positive macro figures. Until not long ago the prevailing view on the financial markets was that the Federal Reserve would not raise interest rates until the second half of this year. Given the unambiguous current forecasts, should the Federal Reserve disappoint market expectations the US dollar will be exposed to a substantial fall."

Published by Globes [online], Israel business news - www.globes-online.com - on March 13, 2017

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

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Shekels Photo: Shutterstock
Shekels Photo: Shutterstock
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