Swiss bank UBS predicts that the shekel-dollar exchange rate will rise to NIS 4/$ within six months.
A review published by UBS at the end of last week raised the bank's target exchange rate to NIS 3.95/$ in three months, compared with the previous forecast of NIS 3.82/$, and NIS 4/$ in the next six months, compared with the previous forecast of NIS 3.85/$.
The bank writes, "The deflationary trend is likely to result in further shekel weakness. However, Israel's strong balance of payments should stem the depreciation in the medium term."
Halman-Aldubi: The shekel will weaken
The Halman-Aldubi investment house believes that the shekel will continue to weaken against the dollar in the coming weeks.
The shekel has lost 12% against the dollar since July, following a decline in Israel's economic data, and especially due to the end of quantitative easing in the US and predictions that the US Federal Reserve will begin raising the interest rate in mid-2015.
Halman-Aldubi expects the shekel to continue weakening against the dollar, and predicts that oil prices will go on falling. Last Friday, the price of oil plunged a further 10% to $67 a barrel, following the OPEC oil cartel's decision not to cut production, despite the lower price.
While the S&P 500 is at peak levels, Halman-Aldubi nevertheless recommend maintaining exposure to this index, and also to the Israel Tel Aviv 25 Index. The investment house said that the main reasons were continued growth in the US in the third quarter, the resumption of growth in Israel in the third quarter following Operation Protective Edge, and fairly good financial statements. They recommended the US stock market, due to the upcoming holiday season there, which is expected to contribute to a rise in consumption, further economic improvement, and the low interest rates.
Published by Globes [online], Israel business news - www.globes-online.com - on November 30, 2014
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