The shekel is strengthening against the dollar and the euro in inter-bank trading this morning on the foreign exchange market. After weakening against the dollar at the opening, the shekel again began strengthening against the dollar after the Bank of Israel yesterday set the shekel-dollar rate down 0.5% at NIS 3.75/$ - its lowest point for eight months. This morning, the shekel-dollar exchange rate is up 0.09% in comparison with yesterday's representative rate, at NIS 3.747/$ and the shekel-euro rate is down 0.45%, at NIS 4.958/€.
On world markets, the US dollar is strengthening against the euro at $1.323/€
There had seemed to be progress yesterday in the US in talks between the Democrats and the Republicans over the "financial cliff" but negotiations have been halted. Nevertheless, President Barack Obama expressed optimism that the sides will reach agreement before Christmas.
FXCM Israel thinks that foreign currency market traders and share markets are conducting business around the tried and trusted motto of "buy on rumors sell on news." In their opinion the ups and downs in fiscal cliff talks is dictating the direction of markets each day and when the agreement is finally reached that will put an end to the current rally and there will be some sort of downward correction. "In the long term market conditions lean towards a weakening of the dollar."
Prico Group CEO Yossi Fraiman said, "In our estimation we won't yet see a depreciation of the shekel in the short term although appreciation of the shekel in the short term is limited to NIS 3.68-3.72/$. However, in the long term there is no change in our belief that the shekel will again strengthen with the exchange rate moving below NIS 3.7/$."
Published by Globes [online], Israel business news - www.globes-online.com - on December 20, 2012
© Copyright of Globes Publisher Itonut (1983) Ltd. 2012