The shekel is gaining strength today against the US dollar and the euro, and is at its strongest levels against the dollar since early April. In the afternoon interbank session, the shekel was down 0.73% against the dollar at NIS 3.697/$, and down 0.63% against the euro at 4.002/€.
On the Friday before Memorial Day and the Independence Day holiday, the Bank of Israel set the representative shekel-dollar rate 0.081% higher than on Thursday, at NIS 3.724/$, and the representative shekel-euro rate was set 0.022% higher at NIS 4.012/$. €.
“The weakness of the dollar in the world, coupled with the supply of foreign exchange by (Israeli) exporters, has led to a surplus of dollars in the local market and an appreciation of the currency,” says Yossi Freeman, CEO of Prico Risk Management, Finance and Investment. Foreign banks and Israeli banks have learned to take advantage of these situations, which leads to sharp fluctuations in exchange rates. In our estimation, the security situation may continue to increase demand and the depreciation of the shekel. The local currency rate may continue to move within a wide range of rates.”
Mizrahi Bank Chief Economist Tefahot Ronen Menachem says: “The rise in the value of the shekel this morning reflects the sharp fluctuations of the currency recently. Today’s rise in the value of the shekel comes with the latest inflation numbers in the United States and Israel, and these numbers could decide whether Part of the shekel's strength is due to the dollar's weakness in international markets.
Don't forget the geopolitical situation
Menachem explains that the shekel is getting stronger despite the negative security developments. “If there is another deterioration, God forbid, the trend could change.” So far, the IDF's activity in Rafah, although media sources have indicated that this activity is limited in scope, has not resulted in significant movements in the foreign exchange market.
“We must remember that even after the shekel appreciated this morning, it is still a matter of underpricing against the dollar. In light of all this, I assume that the shekel will continue to fluctuate in the coming period and the period to come.” The Bank of Israel will closely monitor what is happening.”
Published by Globes, Israel Business News – en.globes.co.il – on May 15, 2024.
© Copyright Globes Publisher Itonut (1983) Ltd., 2024.
