Shekel-Dollar Rate Again Climbs Above NIS 4/$

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shekelAt the opening of the trading week this morning, the shekel-dollar exchange rate again crossed the NIS 4/$ line, after dipping below it on Friday. The rate is currently up 0.69% in comparison with Friday’s representative rate, at NIS 4.0245/$. The shekel-euro rate is 0.68% lower, at NIS 4.8705/€. The shekel-dollar rate is at a three-year high.

At 17:30 today, the Bank of Israel is due to announce its key interest rate for August. Most analysts believe that the central bank will leave the rate unchanged at 2.25%. The rate was cut by 0.25% last month.

According to foreign exchange trading firm ATrade, the shekel-dollar rate will attempt to consolidate above NIS 4/$ this week. ATrade comments that if the Bank of Israel springs a surprise interest rate cut, then pressure on the shekel will rise, and the shekel-dollar rate will likely cross the NIS 4.05/$ mark.

ATrade points out that yields on Spanish 10-year government bonds shot up to a historical high of 7.368% this morning, exacerbating fears that Spain will require much more serious assistance than was afforded it last week (€100 million to shore up the Spanish banking system). The euro is therefore plummeting, reaching a new low in the region of $1.2083/€, on the way to the psychologically important support level of $1.2/€.

In its market survey, FXCM writes that if the Bank of Israel does not announce a rate cut today, the shekel-dollar exchange rate will fall back to NIS 3.94/$ or lower.

Source: GLOBES

{ Israel}


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