FXCM Israel: The current correction in the dollar stems mainly from profit taking by speculators.
The shekel is strengthening today against the dollar and against the euro as the US currency's rally fades after the surprise victory of Donald Trump in the US presidential elections earlier this month. In late morning inter-bank trading, the shekel was down 0.21% against the dollar from yesterday's representative rate at NIS 3.858/$, and was down 0.32% against the euro at NIS 4.093/€.
Yesterday, the Bank of Israel set the shekel-dollar representative rate down 0.026% from Monday's rate at NIS 3.866/$, and the representative shekel-euro rate was set down 0.165% at NIS 4.106/€.
FXCM Israel said in its morning survey, "After climbing to a peak of NIS 3.885/$ at the start of the week, the shekel-dollar exchange rate has fallen back to the NIS 3.85-86/$ mark. The current correction in the dollar stems mainly from profit taking by speculators after the sharp rise in the value of the dollar after the election of Donald Trump. The main factor strengthening the dollar has been the expectation that Trump's expansionist fiscal policies will result in rising inflation, which will compel the Federal Reserve to raise interest rates faster than planned. It seems that a rate hike in December is already assured and the markets are pricing in several additional rate hikes in 2017. However, after the dollar's sharp increase over the past few weeks, we are likely to see the pace of the dollar's strengthening moderated. Another factor strengthening the dollar has been the weakness of other major currencies sterling since the Brexit vote, the euro through fears that rising nationalism will see the euro zone crumbling, while the Japanese yen is at its lowest against the dollar since April."
Published by Globes [online], Israel business news - www.globes-online.com - on November 23, 2016
© Copyright of Globes Publisher Itonut (1983) Ltd. 2016
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