Aggressive selling of dollars, and buying of shekels, by foreign investors drove the representative shekel-dollar rate below NIS 3.69/$. The Bank of Israel set the representative shekel-dollar rate at NIS 3.683/$, down 0.94% from its setting on Friday. The shekel is now at its strongest against the dollar since December 2008. The representative shekel-euro rate was set 0.4% higher at NIS 5.3486/€.
Traders told "Globes" today that foreign investors sold hundreds of millions of dollars, and bought shekels. The sellers were primarily macro funds, which are global hedge funds that bet on the direction of currencies, commodities, or derivatives.
Financial Immunities CEO Adam Reuter told "Globes", "The speculators have returned and are doing the main work." Reuter explained that in December, the shekel weakened against the dollar because foreign players clod positions ahead of the end of the year, and since last week have been reopening positions long on the shekel, short on the dollar.
Traders also told "Globes" that speculators were battling due to a "double no touch" option. If the exchange rate reaches NIS 3.65/$, the buyer will make a profit.
Foreign currency trading firm Clal Forex expects the trend for the dollar this week to be bearish, with the possibility of a correction after a strong weakening move.
Earlier today, Easy Forex said it sees a technical support level at NIS 3.69/$, and that breaking through that can drive a sharp move to NIS 3.62/$. Easy Forex analysts say that upgrades in Israel's macroeconomic growth forecasts for 2010 by Merrill Lynch and the Bank of Israel support the shekel.
Published by Globes [online], Israel business news - www.globes-online.com - on January 11, 2010
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