News Column

Cease-fire boosts shekel

August 11, 2014

By Hillel Koren, Globes, Tel Aviv, Israel



Aug. 11--The shekel was strengthening in inter-bank trading this morning as the 72 hour cease-fire between Israel and Hamas seemed to be holding. This follows several days in which the Israeli currency weakened sharply after the Bank of Israel intervened on the exchange market last week to buy foreign currency. The shekel-dollar exchange rate is down 0.41% against the dollar at NIS 3.462/$ and the shekel-euro exchange rate is down 0.28% against the euro at NIS 4.637/euro.

On Friday, the Bank of Israel set the shekel-dollar representative exchange rate at NIS 3.476/$, up 0.754% on Thursday's rate, and set the shekel-euro representative exchange rate at NIS 4.65/euro, up 0.732%.

FXCM Israel's research department said this morning, "The new trading week has opened on the foreign exchange market and the big question is whether the impressive momentum shown by the shekel-dollar exchange rate when the dollar strengthened 1.5% against the shekel last week will continue. This was the biggest rise since May 2013. At the local level factors include the continued fighting in Gaza and the diplomatic mess and the accumulative effect of the Bank of Israel lowering the interest rate and repeatedly intervening on the foreign exchange market. The strengthening of the dollar worldwide and the fall in stock markets also contributed strengthening the dollar locally. The question is whether we are seeing a more significant turning point for the shekel and dollar, with the trend in the sharp fall in the exchange rate which has been going on for several years."

FXCM added, "We see that at least in the short term what caused the sharp rise in the exchange rate was the decision by many speculators to realize profits on short position. After several failed attempts to break the NIS 3.4/$ barrier, investors with short positions finally raised their hands, marked by the sharp rise upwards."

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(c)2014 the Globes (Tel Aviv, Israel)

Visit the Globes (Tel Aviv, Israel) at www.globes.co.il/serveen/globes/nodeview.asp?fid=942

Distributed by MCT Information Services


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Source: Globes (Tel Aviv)


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