News Column

Shekel-dollar exchange rate nears 3-year low

June 22, 2014

By Kobi Yeshayahou, Globes, Tel Aviv, Israel

June 22--The shekel is continuing to strengthen against the dollar and euro, with the shekel-dollar exchange rate near a three-year low. The shekel-dollar exchange rate has fallen 0.21%, compared with Friday's representative rate, to NIS 3.436/$, and the shekel-euro exchange rate has fallen 0.21% to NIS 4.676/euro.

On Friday, the Bank of Israel set the shekel-dollar exchange rate at NIS 3.443/$, down 0.06% on Thursday's rate, and set the shekel-euro exchange rate at NIS 3.686/euro, down 0.17%.

Utrade Investment House senior analyst Elad Solomon says that the dollar's weakness in international markets has a direct effect on the shekel. Although the shekel-dollar exchange rate recovered from its low of NIS 3.44/$ six months ago, it is clear that the NIS 3.50/$ level is a major resistance level, at which sellers block any further rise in the exchange rate. Movement below NIS 3.442/$ could drive the exchange rate down to NIS 3.35/$.

Psagot Investment House Ltd. chief economist Ori Greenfeld said today, "The latest Consumer Price Index (CPI) data show that inflation in Israel is falling. In addition, the strengthening of the shekel in the past month is pressuring the Bank of Israel to again cut the interest rate. However, the upward revision of growth data could persuade the Monetary Committee to hold onto its remaining ammunition and wait another month before cutting the interest rate."

A Psagot survey of investment advisers found that 66% predict that the Bank of Israel will keep the interest rate for July unchanged at 0.75%, and the rest predict an interest rate cut of 25 basis points to 0.5%.


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Source: Globes (Tel Aviv)

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