The shekel is weakening against the dollar and against the euro today with the shekel-dollar exchange rate rising back above the key NIS 3.50/$ threshold.
In morning inter-bank trading, the shekel-dollar exchange rate was up 0.60% from yesterday's representative rate at NIS 3.5131/$, and up 0.22% against the euro at 4.1512/€.
Yesterday, the Bank of Israel set the shekel-dollar representative rate up 0.057% from Monday at NIS 3.492/$ and set the shekel-euro rate up 0.140% at 4.142/€.
Yossi Fraiman, CEO of Prico risks management and investment said earlier this week, "Lively trading by sellers to protect budgets ahead of the new financial year caused a surplus in supply on the foreign exchange market last Friday and contributed to the appreciation of the shekel. On the other hand, lively trading on the capital market provides potential for demand in foreign currency in the short term, such as offerings."
He added, "Looking at the medium to long term, there is no change in our estimates that major surplus supply will continue to support the strengthening of the shekel. In our estimation, in 2018 the dollar will weaken to new lows, and this supports intervention by the Bank of Israel and Ministry of Finance."
Fraiman stressed, "The decision by the Bank of Israel to reduce the scale of its activities to offset the impact of natural gas on the exchange rate, also contributes to the potential for the shekel's appreciation. The Bank of Israel recently announced that it would only purchase $1.5 billion in foreign currency next year, whereas in 2016 and 2017 the scale of its intervention was significantly higher."
Published by Globes [online], Israel business news - www.globes-online.com - on December 6, 2017
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