After strengthening by 2% against the dollar over the past few days, the shekel is starting to weaken slightly today against the dollar and against the euro. In inter-bank transactions in the afternoon, the shekel exchange rate against the dollar increased by 0.08%, at 3.658 / dollar, and the shekel price against the euro increased by 0.18%, at 3.925 shekels / euro.
Yesterday, the Bank of Israel set the representative exchange rate for the shekel against the dollar, down 1.615% from Tuesday, at 3.655 shekels / dollar, and the representative rate for the shekel against the euro was set by 1.28%, at 3.918 shekels / euro.
The change in direction in the forex market came after coalition chairman MK Ofir Katz (Likud) told YNet radio that judicial reform talks would fail and government legislation would be put back on the table.
“Uncertainty about the future of the mediation talks at the President’s Residence is causing turmoil in the local capital market,” says Yossi Freiman, PRICO’s chief risk management officer, finance and investments. “And endangering Israel’s economic strength could hurt the general public,” who will be asked to pay more due to the devaluation of the currency and even lose their jobs with cuts in many companies.Without an agreement, and with a cloud of uncertainty hanging in the air, the dollar could reach the level of 3.8 shekels / dollars or more, which could lead to Rising prices and increasing inflation, followed by increases in interest rates. In our estimation, the cyclical movement in the foreign exchange market is expected to continue, and the upside potential remains limited.”
It is likely that hostile statements along with mitigating statements will continue to accompany us as long as there is no agreed compromise or withdrawal from the legislation, says Ravi Gozlan, Chief Economist at IBI Investment House, and this is seen as part of the negotiations. The market is not Excessively excited, and this is clearly affected by the identity of the speakers and interacts with a slight weakness of the shekel after the rapid rise in recent days. In general, the market is waiting for actual developments, and the first test will be about the committee appointing judges.
Published by Globes, Israel business news – en.globes.co.il – on June 8, 2023.
© Copyright Globes Publisher Itonut (1983) Ltd., 2023.
