Feb. 24--The shekel has strengthened against the dollar, but weakened against the euro in morning inter-bank trading today. The shekel-dollar exchange rate has fallen 0.11%, compared with Friday's representative rate, to NIS 3.506/$, but the shekel-euro exchange rate has risen 0.15% to NIS 4.816/euro. Foreign currency trading is taking place as traders wait for the Bank of Israel's interest rate decision for March this afternoon. Market sources believe that the Bank of Israel will keep the interest rate unchanged at 1%.
FXCM Israel says this morning, "The shekel-dollar exchange rate trod water all through last week just above the NIS 3.50/$ level. Events overseas and volatility in international markets failed to tip the scales in the local foreign currency market. In international markets, after falling to a low of 79.9 in 2014, the global Dollar Index was able to stabilize last week to close above 80.2. Last week's publication of the Federal Reserve's minutes, which indicate that it will continue the tapering of bond purchases as planned, strengthened the dollar in international markets.
"The main risk event for the dollar in international markets this week is Federal Reserve Federal Reserve Board Chairwoman Janet Yellen's testimony before the Senate. If she hints that the Fed will keep the negligible interest rate despite the current unemployment rate of 6.6%, which is close to the target of 6.5% that the Fed set at the outset, the dollar will weaken.
"Technically, so long as the shekel-dollar exchange rate stays above the NIS 3.50/$ threshold, the tendency will be upward. The strengthening of the dollar in international markets should push the shekel-dollar exchange rate toward the upper limit of the NIS 3.54-3.55/$ range. On the other hand, movement below NIS 3.50/$ could drive the currency pair down toward NIS 3.47/3.48/$."
(c)2014 the Globes (Tel Aviv, Israel)
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