The shekel has strengthened against both the US dollar and the euro at the start of the trading week on the foreign exchange market. The shekel-dollar rate is down 0.16% compared with Friday's representative rate, at NIS 3.4864, and the shekel-euro rate is down 0.45%, at NIS 4.7957.
FXCM Israel notes that the shekel was traded below 3.5/$ all last week, and says that this consolidates that level as a ceiling and strengthens downward pressure on the exchange rate. At the same time, FXCM points out that the thin trading on the market because of the Christmas and New Year holidays makes it hard to establish the trend in dollar rates on world markets and against the shekel.
"Meanwhile, criticism is growing of the Bank of Israel's feebleness in the past few weeks," says FXCM, adding, "The bank has taken no effective steps to halt the fall in the exchange rate. This is certainly a testing moment for Governor of the Bank of Israel Karnit Flug, since a slide in the exchange rate will be considered a personal failure for her. At the present level, only a rise above NIS 3.52/$ can generate any upward momentum. On the other side, the downward target points are NIS 3.45/$ and NIS 3.42/$."
Published by Globes [online], Israel business news - www.globes-online.com - on December 30, 2013
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