The shekel has strengthened against the dollar and euro in morning inter-bank trading today. The shekel-dollar exchange rate has fallen 0.12%, compared with Friday's representative rate, to NIS 3.542/$, and the shekel-euro exchange rate has fallen 0.17% to NIS 4.803/€.
FXCM Israel says this morning, "The shekel-dollar exchange rate remains stable at around the key level of NIS 3.55/$, while foreign currency market traders worldwide are watching Washington in the hope that the politicians will reach a deal by October 17 and prevent a catastrophic default.
"In the past few weeks, in view of the US government shutdown and the deadlock in the talks on the budget and for raising the debt ceiling, the dollar has been steadily weakening against leading currencies. The Dollar Index, which tracks the dollar's value against a basket of leading currencies, fell to an eight-month low last week."
FXCM Israel therefore believes that trading in the dollar in international markets, and probably in the Israeli market too, will be highly volatile this week. As October 17 nears, and if there is no major progress in the negotiations, investors will flee from the dollar and it will weaken against the shekel. Conversely, a solution to the crisis should greatly strengthen the dollar in international markets as investors heave a sigh of relief.
Published by Globes [online], Israel business news - www.globes-online.com - on October 14, 2013
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