The shekel soared in pre-Passover trading on Monday. In early afternoon inter-bank trading the shekel-dollar exchange rate was down 1.21% compared with Friday's exchange rate at NIS 3.622/$, and the shekel-euro exchange rate was down 0.70% at NIS 4.71/€.
The dollar also lost ground against the euro on global markets after the new €10 billion Cyprus bail-out agreement saved the island from bankruptcy and strengthened the European currency, and was trading at $1.299/€.
Commenting on the shekel dollar exchange rate FXCM Israel research department said, 'The shekel-dollar exchange rate fell to new lows at the end of last week because of positive geo-political developments. The visit of US President Barack Obama boosted those investors who survived Obama's first term of office. Not that Us support for Israel was ever in doubt but the tense relations between Obama and Netanyahu raised many questions, mainly in the rest of the world, as to the extent of US backing for Israel both economically and geo-politically. Thus the visit had great importance in demonstrating the strength of the relations between the two countries."
FXCM Israel continued, "Above and beyond the political and security significance of the visit, and the positive messages he brought with him, the visit should have a positive effect on the Tel Aviv Stock Exchange. The backing that Obama has given the new government will strengthen confidence in market stability and its ability to withstand the economic and geo-political challenges."
"To all this can be added the end of the estrangement between Israel and Turkey. This is good news for the Israeli economy and strengthens Israel's geo-political standing. After a sustained period in which the exchange rate was trapped between NIS 3.66/$ and NIS 3.70/$, the rate broke below this band on Friday to reach a new low. The breakthrough marks the renewal of a downward trend with the next target NIS 3.61/$ - NIS 3.63/$. Due to the shortened trading week and thin trading during the Passover holiday, we may see the shekel dollar exchange rate treading water for a few days."
Published by Globes [online], Israel business news - www.globes-online.com - on March 25, 2013
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