The shekel is again strengthening in morning inter-bank trading against the dollar and against the euro for the second straight day after the Bank of Israel Monetary Committee decided on Monday to keep the interest rate for June unchanged at 0.1%.
In late morning inter-bank trading, the shekel-dollar exchange rate was down 0.31% at NIS 3.853/$ compared with yesterday's representative rate, and the shekel-euro rate was down 0.62% at NIS 4.295/€.
Yesterday, the Bank of Israel set the shekel-dollar representative rate down 0.361% from Monday's rate at NIS 3.865/$, and the representative shekel-euro rate was set down 0.552% at NIS 4.322/€.
FXCM Israel said this morning, "The shekel-dollar exchange rate continues to correct downwards and stabilized this morning around the NIS 3.85/$ mark, after climbing sharply in recent weeks to as high as NIS 3.888/$, due to the dollar's strengthening on world markets and disappointing growth figures in Israel. However, the Bank of Israel's decision this week to remove the possibility of a rate cut from the agenda has led to shekel-dollar profit taking. At the moment it still looks like this is a correction rather than a change in the upward trend. The widespread belief is still that the US Federal Reserve will announce a rate hike at its meeting in June and will implement one or two more subsequent rate hikes in 2016, if US economic data supports this.
Published by Globes [online], Israel business news - www.globes-online.com - on May 25, 2016
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