Shekel weakens as Gaza violence continues

The shekel was down last week, which was marked by a surprise 50 basis point rate cut.

The shekel-dollar exchange rate is rising 0.5% in options trading, reaching NIS 3.653/$. With inter-bank trading closed on Sunday, shekel options are reflecting violence in Gaza as much as local economic events.

The representative rate was set on Friday at NIS 3.635/$, with the shekel weakening 1.2% over the course of last week, which was marked by a surprising 50 basis point cut in the Bank of Israel's interest rate.

The shekel has nonetheless risen 5.5% against the dollar in the first two months of 2008. Bank Hapoalim (LSE: BKHD; TASE: POLI) analysts pointed out that foreign investment - a major component of the shekel's recent strength - is expected to continue, as the outlook for Israel's economy continues to be strong, especially when compared with other economies.

Published by Globes [online], Israel business news - www.globes-online.com - on March 2, 2008

© Copyright of Globes Publisher Itonut (1983) Ltd. 2008

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