July 15--The shekel has strengthened this morning against the US dollar and the euro on the local foreign exchange market, against the background of the security cabinet's decision to accept an Egyptian proposal for a cease-fire between Israel and Hamas. The shekel-dollar rate is currently down 0.45% in comparison with yesterday's representative rate, at NIS 3.4077/$, while the shekel-euro rate is down 0.66%, at NIS 4.6349/euro. Yesterday too, the shekel strengthened against the dollar, to a representative rate of NIS 3.423/$. Against the euro, the shekel weakened yesterday, to a representative rate of NIS 4.6658/euro.
FXCM Israel says in its market review this morning, "The cease-fire, which will prevent an escalation of the situation and avoid a ground operation, will be positively received by foreign exchange traders, will reduce geo-political risk, and will strengthen the shekel. In addition, positive sentiment on world capital markets will also contribute to a weakening of the dollar against the shekel. The short players feel that they are in the driving seat, and are exploiting the positive sentiment to sell dollars."
Today, US Federal Reserve chairwoman Janet Yellen will start her two-day testimony to Congress, in which she is expected to present the central bank's plan for exiting its expansionary monetary policy. "If Yellen's rhetoric is a little tougher, raising expectation of a dollar interest rate hike, the dollar can be expected to appreciate, but continued adherence to a zero interest rate policy will continue to weigh on the dollar."
At 18:30 this evening, Israel'sCentral Bureau of Statistics is due to release Consumer Price Index data for June. Market forecasts are of a 0.2% rise in the index for June, after a 0.1% rise in May.
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