Despite its current weakness, HSBC expects the shekel to strengthen to 3.6 shekels per dollar by the end of 2024 and 3.4 shekels per dollar by the end of 2025.
The shekel exchange rate stabilized today against the US dollar and the euro after a week of heavy losses. In interbank trading in the afternoon, the shekel exchange rate against the dollar decreased by 0.04% to NIS 3.761/dollar, and the shekel exchange rate against the euro remained unchanged at NIS 4.155/euros.
Yesterday, the Bank of Israel set the shekel-dollar exchange rate at 3.763 shekels per dollar, up 0.293% from Monday, and the shekel-euro exchange rate at 4.154 shekels per euro, up 0.275%.
The shekel is trading at its weakest level in a month against the U.S. dollar as sharp declines in U.S. stock markets have forced Israeli institutional investors to sell shekels and buy foreign currencies to hedge their positions. Continued tensions in the north and fading hopes of a deal over the hostages have also weakened the Israeli currency.
But HSBC is urging investors to bet on the shekel. In its weekly report, Leader Capital Markets cited an HSBC report that sees the shekel strengthening to NIS 3.60/USD by the end of 2024 and NIS 3.40/USD by the end of 2024. HSBC’s bullish forecast for the shekel is due to positive fundamentals in Israel and conservative monetary policy, compared to expectations of interest rate cuts in Western countries. The market may have already priced in a 0.25% rate cut by the US Federal Reserve next week.
This article was published in Globes, Israeli Business News – en.globes.co.il – on September 11, 2024.
© Copyright Globes Publisher Itonut (1983) Ltd., 2024.
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