The shekel weakened against the dollar and strengthened against the euro on Friday. The Bank of Israel set the shekel-dollar representative exchange rate at NIS 3.973/$, up 0.735% on Thursday's rate, and set the shekel-euro representative exchange rate at NIS 4.319/€, down 0.493%.
In futures trading on Friday afternoon the shekel-dollar exchange rate fell 0.26% to NIS 3.963/$ and the shekel-euro exchange rate fell a further 0.17% to NIS 4.312/€.
Despite this latest weakening against the shekel, the Israeli currency strengthened by 2% this week against the dollar and by 0.2% against the euro.
Trading has been volatile over the past week following an HSBC report that the Bank of Israel would introduce a quantitative easing program and lower interest rates below zero. This greatly weakened the shekel. But in the event the Bank of Israel did neither at the meeting of its Monetary Committee on Monday and the shekel has strengthened since then, even though the Bank purchased $250 million in foreign currency, and the Ministry of Finance hedged some of Israel's debt.
Bank Leumi economists pointed out that the dollar has been generally weaker around the world after the US Federal Reserve altered its interest rate outlook and will now raise rates earlier than expected.
Israel's Union Bank in its weekly survey said that it expects volatility in the foreign exchange market to continue and that the support point for the shekel-dollar rate is at NIS 3.88 followed by NIS 3.80. Union Bank added that the resistance point is NIS 4.057, followed by NIS 4.1.
Published by Globes [online], Israel business news - www.globes-online.com - on March 27, 2015
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