The shekel is stable against the dollar, despite the tense security situation in Israel, which has been weighing on the local currency in recent days. The dollar is trading at a two-year high against the shekel.
In inter-bank trading today, the shekel-dollar rate is down 0.16% at NIS 3.835/$, and the shekel-euro rate is up 0.05% at NIS 4.801/€. Yesterday, the Bank of Israel set the shekel-dollar representative exchange rate at NIS 3.841/$, up 0.4%, breaking the NIS 3.84 threshold for the first time since November 28, 2012, following yesterday’s terrorist attack at a Jerusalem synagogue. The shekel-euro rate rose 0.5% to NIS 4.803/€.
In global markets, the US dollar has strengthened slightly against the euro, and is trading at $1.253/€, and $1.561/£. The dollar-yen rate is up 0.4% at ¥117.34/$, a seven year low for the Japanese currency against the dollar.
FXCM Israel Research Department said, “It is difficult right now to see what could halt the continued strengthening of the dollar against the shekel.” In light of the fact that the dollar weakened in global foreign currency markets yesterday, FXCM believes that the rise in the shekel-dollar rate stems from the shekel’s weakness. The horrific terror attack yesterday furthered damaged attitudes towards Israel on the parts of foreign investors, and in general: “All this joins the fundamental decline in the Israeli market, as evidenced by the negative GDP data released earlier this week, and speculation about the possibility that the Bank of Israel will begin quantitative easing.”
The FXCM goes on to say, “Despite the extreme situation that the currency pair is in, and the records being broken day after day, there is no incentive to buy shekels in the current situation, and it appears that the long-term investors are not hesitating to realize the profits on their favorable positions. The next threshold is NIS 3.87/$. Only a drop below NIS 3.8/$ will change the picture.”
Published by Globes [online], Israel business news - www.globes-online.com - on November 19, 2014
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