Shekel resumes steep slide – Globes
The shekel is weakening against the dollar and against the euro today. In afternoon inter-bank trading, the shekel exchange rate is up 1.08% against the dollar at NIS 3.341/$ and is up 0.77% against the euro at NIS 3.339/€.
Yesterday, the Bank of Israel set the representative shekel-dollar rate down 0.422% today from Monday, at NIS 3.305$, and the representative shekel-euro rate was set 0.136% lower at NIS 3.313/€.
The shekel is weakening after reaching a four-month strongest against the dollar at the start of August. The fall on world stock markets following the hawkish comments by US Federal Reserve Chair Jerome Powell last Friday has been the trigger for the weakening of the shekel as investors scurry to safe haven currencies.
Psagot macro-analyst Matan Shitrit said, “In recent days the dollar has again strengthened on world markets and against the shekel due to changes in market sentiment, which began on Friday following the speech of the Fed chair at Jackson Hole, which was sharp, and very hawkish. The trend, which continued last night with the publication of US job vacancy data, indicates a continued tightening of the job market, which supports continued aggressive monetary tightening by the central bank.”
He added, “In the short term, the direction of the shekel will mainly be set by global markets, with the main reason for this being institutional exposure. The falls on the markets force the institutional bodies to buy foreign currency in order to maintain their required level of foreign currency exposure, in other words, the demand for dollars has strengthened. It is important to mention that basic factors like the current account surplus and real investments in the Israeli economy continue to support a strong shekel in the long term, but in our estimation in the short-term market volatility will continue and persist in supporting a depreciation of the shekel in the coming weeks and months.”
Published by Globes, Israel business news – en.globes.co.il – on August 31, 2022.
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