Shekel stronger despite expected US rate hike

Shekels Photo: Shutterstock

FXCM Israel: The market has priced in a 90% likelihood that the Fed will raise the US interest rate by 0.25% tonight.

The shekel is strengthening against the dollar and against the euro today. In afternoon inter-bank trading, the shekel-dollar exchange rate was down 0.28% from yesterday's representative rate at NIS 3.651/$, and down 0.32% against the euro at 3.881/€. The shekel is stronger against the dollar despite expectations that the US Fed will raise key interest rates by 0.25% at its monthly meeting this evening.

Yesterday, the Bank of Israel set the shekel-dollar representative rate down 0.462% compared with Monday's rate at NIS 3.661/$, and the representative shekel-euro rate was set down 0.210% at NIS 3.893/€.

FXCM Israel said in its daily review this morning, "The shekel-dollar exchange rate is trading in the NIS 3,66/$ region ahead of this evening's US Fed interest rate decision. The widespread market belief is that the Fed will raise the interest rate by 0.25%.due to improved macroeconomic data over the past few months and remarks by senior Fed officials including chairperson Janet Yellen, that there is a high likelihood of an interest rate hike this month. The market has priced in that likelihood at 90%. This puts the dollar at risk if the Fed disappoints the market and does not raise the rate."

Published by Globes [online], Israel business news - www.globes-online.com - on March 15, 2017

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

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Shekels Photo: Shutterstock
Shekels Photo: Shutterstock
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