Foreign currency trading got off to a mixed start this morning, with the shekel-dollar rate falling 1.44% to 3.481/$. The shekel-euro rate, on the other hand, rose 0.5% to 5.05/€.
The trend was similar on markets overseas, with the euro gaining against the dollar but weakening against the Japanese yen.
The rescue plan announced by the US government and Federal Reserve at the end of last week appears to have weakened the dollar since investors expect that the astronomical cost of the plan will result in an increase in the US's fiscal deficit, which will in turn weaken the US currency further.
Traders on the local market are awaiting today's announcement by the Bank of Israel of the interest rate for October, with Governor Israel Stanley Fischer widely expected to leave the interest rate on hold at 4.25%.
The shekel-dollar rate is currently down 1.29% at NIS 3.4865, and the shekel-euro rate is up 0.88% at NIS 5.0593/€.
Online foreign currency broker Prico expects that the potential appreciation of the shekel will be limited to NIS 3.38-3.42/$, with strong demand expected at around NIS 3.46/$. Prico believes the shekel-dollar rate is likely to rise to 3.62/$ and higher in the short-term, and a breakthrough of the 3.66/$ level could send it even higher to 3.73/$, 3.75. 3.80, and even higher.
Published by Globes [online], Israel business news - www.globes-online.com - on September 22, 2008
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