The shekel rose sharply today against the dollar and stabilized against the euro. In the afternoon dealings between banks, the shekel exchange rate against the dollar decreased by 1.29%, at 3.618 shekels / dollar, and the shekel price rose against the euro, by 0.05%, at 4.042 shekels / euro.
Yesterday, the Bank of Israel set the representative rate of the shekel against the dollar at 1.186% lower than on Tuesday, at 3.665 shekels / dollar, and the representative exchange rate in the shekel against the euro was set at 1.053%, at 4.039 shekels / euro.
Ronen Menachem, chief economist at Mizrahi Tefahot Bank, explains, “The rise of the shekel against the dollar continues. I attribute this first and foremost to the optimism in foreign markets, which also extended to the stock market in Israel yesterday. The sharp increases have increased exposure to The shares are from local investors abroad and it is possible that the link between increases in foreign markets and the strengthening of the shekel, weakened by judicial reform, is at least temporarily renewed. “.
“The market is also exposed to media discourse on the issue of judicial reform legislation and the possibility / initiatives / international pressures to ease movements and renew negotiations. It is possible that the market is pinning its hopes on this and “constructing.” In the period leading up to the second and third readings. The Bank of Israel’s comfort forecast for the fiscal deficit It is also, in my opinion, a factor that will provide support for the shekel in the short and medium term.
Menachem concludes, “We must remember that even after the gains of the past two or three days, the shekel is still within the bounds of over-depreciation that the Bank of Israel is talking about. Therefore, moves in any direction in the range can continue from 3.55 shekels to 3.75/dollar.” As we have seen in the past two months, the shekel will continue to react in all directions to both foreign markets and domestic developments.Tomorrow the consumer price index will be published in Israel and it will be important to examine the reaction of the shekel to the figure.
“The shekel is rising against the dollar due to dollar weakness around the world.”
Chief Economist at IBI Investment House, Ravi Gozlan, said, “The rise in the shekel price against the dollar is mainly due to the general weakness of the dollar in the world, and to a lesser extent due to domestic factors. The global factor, the weakness of the dollar in the world gained momentum after the moderate increase more Inflation is expected in the United States in June. On the other hand, on the other hand, the strength of the shekel is more moderate, and reflects some relaxation after the doubts that prevailed after the passage of the first reading of the law to limit the court’s use of unreasonable cases. Thus, against the euro, The shekel continues to trade at high levels recently.”
Yossi Freimann, CEO of Risk Management, Finance and Investments at PRICO, said that “the continued increase in currency exposure of institutional investors, led by funds, supported measures to limit foreign currency exposure, which amounted to more than 19% of the value of assets. In our estimation, the situation is Which refers to this influx of shekels expresses preemptive technical movements of capital on a large scale and not a change in tastes or hedging policy.Plans to encourage economic activity in China as well as reduce oil supply via OPEC will support higher prices.In our estimation, interest rates will continue to The United States, Europe and the United Kingdom on the rise in order to calm inflation, but the tight labor market when unemployment is low will continue to support wage increases and inflationary pressures.The Bank of Israel will be asked to raise the interest rate in shekels, and the challenge in the public arena will be whether to make a decision to raise it on the eve New Year’s Eve “.
Published by Globes, Israel business news – en.globes.co.il – on July 14, 2023.
© Copyright Globes Publisher Itonut (1983) Ltd., 2023.