Over the past week the shekel fell by 0.6% against the US dollar, but in the past month it rose by 1.5%.
The shekel is declining today against the US dollar and the euro. In afternoon interbank trading, the shekel rose against the dollar by 0.83% to NIS 3.657/USD, and against the euro by 0.89% to NIS 3.869/EUR.
Yesterday, the Bank of Israel set the shekel-dollar exchange rate at 3.627 shekels/dollar, up 0.028% from Tuesday, and the shekel-euro exchange rate at 3.964 shekels/euro, down 0.112%.
“The shekel continues its volatile behavior, reacting to defense and political developments, but without any real direction,” said Ronen Menachem, chief economist at Mizrahi Tefahot Bank. “As evidence of this, the shekel fell by 0.6% against the US dollar over the past week, but in the past month it strengthened by 1.5% against the dollar. Today’s depreciation can be attributed to events such as the shooting attack in Samaria and reports of Hezbollah drone images.”
“But to a no lesser and perhaps greater extent, this is a reaction to the continued decline in US stock markets, especially the Nasdaq, which intensified yesterday. The shekel tends to weaken during such periods due to the need for corporate entities to convert shekels into dollars to protect against the erosion of their assets due to their exposure abroad. In any case, the tension surrounding the impending hostage deal will continue to affect shekel volatility in the short term. The longer-term trend will depend to a large extent on whether the decline in the US market continues.”
This article was published in Globes, Israeli Business News – en.globes.co.il – on July 25, 2024.
© Copyright Globes Publisher Itonut (1983) Ltd., 2024.
Shekel Image source: Shutterstock Vladerina32