The shekel is weakening this morning against the dollar and against the euro despite yesterday's figures released by the Central Bureau of Statistics that the Israeli economy grew at an annual rate of 3.7% in the second quarter. In morning inter-bank trading, the shekel was up 0.32% against the dollar from yesterday's representative rate at NIS 3.787/$ and was up 0.25% against the euro at NIS 4.264/€.
Yesterday, the Bank of Israel set the shekel-dollar representative rate down 0.867% from Monday's rate at NIS 3.775/$, and the representative shekel-euro rate was set down 0.040% at NIS 4.254/€.
FXCM Israel said in its morning survey, "After falling to a new low-point of NIS 3.77/$ yesterday, the shekel-dollar exchange rate recovered slightly this morning and is trading above NIS 3.78/$, due to hawkish comments yesterday by two senior US Federal Reserve executives, which again aroused expectations of an interest rate hike. Both the Fed CEO in Atlanta Dennis Lockhart and the New York CEO William Dudley said there was a reasonable likelihood of a rate hike this year and possibly even in September. Despite the comments, a mass of poor macroeconomic data published about the US economy have lowered expectations of a rate hike."
FXCM Israel added, "At the moment, despite the fall below the critical NIS 3.80/$ level, the Bank of Israel has stood on the side and not intervened in trading. However, if the fall continues to new lows, the Bank of Israel may have no choice but to use intervention tools."
Published by Globes [online], Israel business news - www.globes-online.com - on August 17, 2016
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