May 27--The shekel has strengthened against the major currencies in foreign exchange trading this morning. The shekel-dollar rate is down 0.34% in comparison with Friday's representative rate, at NIS 3.4783/$, while the shekel-euro rate is down 0.17%, at NIS 4.7451/euro.
In the past few days, analysts had started to estimate that the Bank of Israel would cut its interest rate for June, leading some foreign exchange market players to close short positions on the shekel-dollar pair and even open long positions, that is, to buy dollars. The reasons for the estimates were weak first quarter growth figures and lower than expected inflation.
In the event, the Bank of Israel Monetary Committee decided yesterday to leave the interest rate unchanged at 0.75%, on the grounds that it was too early to gauge the depth of the economic slowdown. In other words, the central bank does not rule out an interest rate cut at a later stage.
On world markets, the dollar has weakened slightly this morning against the other major currencies as important macro figures on the US economy are due to be released later today.
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