Shekel Takes the Hint, Lying Low…For Now

YERUSHALAYIM -

The shekel continued lying low on Tuesday after the Bank of Israel’s purchase of $100 million dollars, which boosted the shekel-dollar exchange rate by 0.2% to NIS 3.627/$ as of late afternoon.

Market sources told Globes that the Bank of Israel has set 3.60 as a psychological marker for intervention, and that BOI Governor Stanley Fischer stands ready to buy more dollars in the near future, if necessary.

However, Atrade forecast that the shekel-dollar exchange rate will slide again below NIS 3.60/$ in the near term, but the Bank of Israel will not rush to intervene again. The next intervention will probably not occur until or unless the NIS 3.55/$ is reached, though then it will be larger, Atrade said.

FXCM Israel said that it would take a more robust performance by the dollar to effect a significant change, that so far the movement is likely to be only temporary.

“Only movement above NIS 3.65/$ may result in an upward correction,” it says.

Meanwhile, Bloomberg issued its assessment on Monday that the shekel had performed the best of the 31 currencies monitored during the first quarter of 2013. Its leading position was attributed to Israel’s stable growth and in anticipation of gas flow from the Tamar field, which is expected to help offset the state deficit.