The shekel is weakening in inter-bank foreign currency trading against the dollar and the euro following the terror attack in Jerusalem this morning and the continuing coalition crisis. The shekel-dollar rate is up 0.27% at NIS 3.834/$, and the shekel-euro rate is up 0.22% at NIS 4.79/€.
Yesterday, the Bank of Israel set the shekel-dollar representative exchange rate at NIS 3.824/$, up 0.236% on Friday's rate, and set the shekel-euro representative exchange rate at NIS 4.78/€, up 0.534%.
FXCM Israel Research Department said this morning, "The dollar has opened strong against the shekel this week and trading has successfully pushed the exchange rate above NIS 3.83/$ to the highest level since December 2012. The next target in the rally is NIS 3.85/$. At the moment speculators are not letting up for a moment and only a fall below NIS 3.8/$ will change the momentum."
FXCM Israel added, "In the domestic market speculation is growing that the Bank of Israel's implementation of its quantitative expansion policy is more likely after the growth figures published earlier in the week, showing that the Israeli economy contracted 0.4% in the third quarter of 2014.Such a policy would sharply weaken the shekel. The slowdown in growth, the dispute over the budget, and deep cracks in the coalition are hitting investors' faith in the political-economic leadership and weighing on the shekel. This will influence the shekel in the coming weeks."
Published by Globes [online], Israel business news - www.globes-online.com - on November 18, 2014
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