Even though the Bank of Israel purchased $400 million in foreign currency yesterday afternoon, the shekel is stronger against the dollar and against the euro today. In late morning inter-bank trading, the shekel-dollar exchange rate was down 0.24% from yesterday's representative rate at NIS 3.759/$, and down 0.24% against the euro at NIS 4.058/€.
Yesterday, the representative shekel-dollar rate was set 0.03% lower by the Bank of Israel, at NIS 3.768/$, and the representative shekel-euro rate was set 0.32% higher, at NIS 4.068/€.
FXCM Israel said in its daily review this morning, "The shekel-dollar exchange rate fell yesterday to NIS 3.755/$, its lowest rate since the start of October 2016, before the Bank of Israel decided to halt the appreciation and intervene in trading. Following the intervention, the shekel-dollar exchange rate rose to NIS 3.78/$ but it is still unclear if there will be any follow-up and if the rate has yet bottomed-out. If the dollar continues to be weak on global markets, then the Bank of Israel's actions won't suffice to reverse matters. Even though the Bank of Israel does not hesitate to intervene in trading every time the exchange rate fall below levels that put exporters at risk, we may be entering a period of global currency wars due to President Trump's remarks and his estimates that the dollar is too strong. While the shekel-dollar rate remains below NIS 3.80/$, the tendency is for further falls in the value of the dollar.
Published by Globes [online], Israel business news - www.globes-online.com - on February 2, 2017
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