The shekel has continued to strengthen against the dollar and euro in morning inter-bank trading today. The shekel-dollar exchange rate is down 0.21% at NIS 3.579/$ and the shekel-euro rate is down 0.44% at NIS 4.711/€.
Yesterday, the day after the Bank of Israel intervened in the market for the second time in April, the shekel-dollar representative exchange rate was set down 0.20% at NIS 3.587/$, and the shekel-euro exchange rate was set up 0.76% at NIS 4.731/€.
FXCM Israel notes that Warren Buffett’s acquisition of the remaining stake of the Wertheimer family in Israeli precision cutting tools company Iscar for $2.05 billion through Berkshire Hathaway is likely to draw investor attention to Israel, increase confidence in the Israel economy, and enhance its image, and strengthen the shekel.
FXCM Israel said, “These factors are likely to have taken the sting out of the Bank of Israel’s limited intervention and the dollar has weakened against the shekel for nine consecutive days, with NIS 3.56/$ and NIS 3.55/$ as the coming support levels. It’s difficult seeing the Bank of Israel being able to bring about change in the foreign exchange market. The Bank will remain on the side for now or reduce to a symbolic minimum the scope of intervention, and wait for a more fit time, or intervene at a lower rate, around NIS 3.5/$. At current prices, the market won’t agree to change direction.”
Atrade analysts also believe that Fischer’s firm hands are no longer there and they are exploiting the situation well. “Perhaps the very fact that the governor is finishing in his role soon hits the ability to halt the speculators’ attack. If the Bank of Israel does not intervene soon the next level to test it will be NIS 3.55/$.
Source: GLOBES ISRAEL