The shekel is weakening sharply today against the US dollar and is strong against the euro. In the afternoon of interbank trading, the NIS-USD exchange rate rose 1.40%, to NIS 3.678/$, and the NIS-Euro rate rose 0.16%, to NIS 3.782/EUR.
Yesterday, the Bank of Israel set the shekel-to-representative dollar rate 0.248% lower than on Monday, at 3.627 shekels/dollar, and the shekel-to-representative euro rate was set 0.214% higher at 3.775 shekels/euro.
The dollar is strengthening around the world after reports in the United States that President-elect Donald Trump will declare a national economic emergency to provide legal justification for a new tariff program.
“The shekel is currently showing volatility against major currencies, including the US dollar, the euro and the British pound,” Ran Sinai, chief economist at Ultra Finance, said earlier today. “The shekel has risen by about 5% since October, when it traded above the shekel.” “. However, in recent days, some weakness has been evident, apparently following the change in policy of the Federal Reserve, which decided to slow the pace of interest rate increases against the euro and the British pound, with the euro exchange rate currently at 3.783 and the pound sterling exchange rate currently at 4.558, significantly strengthening. An impressive increase of about 11% since September, when the rate was 4.21 and 5.04 shekels against the euro and pound sterling, respectively.
He added: “There are a number of key factors influencing these trends. On Monday, the Bank of Israel left the interest rate at 4.5%. Governor Professor Amir Yaron explained that this step aims to reduce and curb inflation.”
“Looking ahead, continued restrictive monetary policy in Europe and the UK may weaken the shekel against major currencies. However, additional monetary steps taken by the Bank of Israel and a potential improvement in the political situation in Israel may strengthen the shekel’s position and positively influence its trends in Markets.
Published by Globes, Israel Business News – en.globes.co.il – on January 8, 2025.
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