The shekel weakened sharply against the dollar and the euro on Friday. The Bank of Israel set the shekel-dollar representative exchange rate at NIS 4.053/$, up 1.173% on Thursday's rate, and set the shekel-euro representative exchange rate at NIS 4.329/€, up 1.444%.
In futures trading on Friday afternoon, the shekel-dollar exchange rate weakened a further 0.14% to NIS 4.059/$ and the shekel-euro exchange rate rose a further 0.7% to NIS 4.359/€.
The Israeli currency's weakness is due to major speculation that the Bank of Israel will again cut the interest for April when the Monetary Committee meets on Monday to make the decision. Last month the Bank of Israel already cut the rate by 15 basis points to an historic low of 0.10%.
HSBC expects the Bank of Israel to cut its interest rate to below zero and to launch a quantitative easing program in the range of NIS 24-72 billion.
In its weekly survey Union Bank said, "In line with trading on world markets, in Israel the shekel-dollar exchange rate has been very volatile this week, and even fell back below NIS 4.05/$. In the coming period shekel-dollar trading will be influenced by global trading and the economic guidelines of the new government being set up in Israel. The support point for the shekel-dollar is at NIS 3.88/$ and after that NIS 3.8/$, while the resistance point is NIS 4.057/$ and after that NIS 4.10/$."
Published by Globes [online], Israel business news - www.globes-online.com - on March 20, 2015
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