Shekel flat after volatile week

03/09/2014
Hillel Koren
Source: Globes Israel's Business Arena

FXCM Israel: It is possible we are about to see a further weakening of the shekel.

After a week of volatile foreign exchange trading following the surprise 0.25% interest rate, which mainly saw the shekel weaken, the Israeli currency is flat today in morning interbank trading. The shekel-dollar exchange rate was down 0.05% in comparison with yesterday's representative rate, at NIS 3.576/$, and the shekel-euro rate was up 0.17%, at NIS 4.6998/€.

Yesterday, the Bank of Israel set the shekel-dollar representative exchange rate at NIS 3.578/$, down 0.028% on Monday's rate, and set the shekel-euro representative exchange rate at NIS 4.692/€, down 0.215%.

FXCM Israel research department said, "The shekel-dollar exchange rate continues to consolidate around the NIS 3.57 - NIS 3.58 level. The fact that we have not seen a significant downwards correction in recent days shows the market's bullish sentiments and it is possible that we are about to see another breakthrough upwards.

FXCM added, "The level of resistance is NIS 3.58/$ and rising above that will pave the way to the key NIS 3.6/$ level. The shekel-dollar exchange rate is currently influenced by a combination of domestic and international factors. In Israel the debate about the budget is entering the decisive phase and the prime minister will have to choose between the stance of the finance minister who wants to avoid tax hikes and Karnit Flug who warns about the consequences of increasing the deficit. The global market does not forgive irresponsible fiscal policies and expanding the deficit will weigh very heavily on the shekel and cause foreign investors to flee."

Link: 
 http://www.globes.co.il/en/article-shekel-flat-after-volatile-week-1000968806.