Dollar Tops Four Shekels, Then Slips Back

YERUSHALAYIM (Hamodia Staff) -

The dollar broke the 4-shekel barrier on Monday, then dropped back down shortly afterwards, and on Tuesday afternoon was pegged at 3.9413.

The euro also posted a strong gain on the shekel, advancing almost 0.6% to a Bank of Israel rate of 4.4903 after touching a 12-year low on Friday.

“Until the Bank of Israel returns to ‘play’ in the forex market, the shekel will be affected by global developments,” Avichai Shoretzki, chief strategist for global markets at IBI Israel Brokerage & Investments, told Haaretz. “As a result, it is expected to strengthen against the shekel and, so it seems, weaken against the dollar.”

The shekel’s modest bounceback was credited to Monday’s announcement by the Bank of Israel that it would leave its interest rate unchanged for February at 0.25%.

Prico Asset Management CEO Yossi Fraiman explained that “rises on the stock exchange in Tokyo and stabilization of the dollar/euro rate below $1.1350/€ support ‘business as usual’, with the markets expecting continued demand for the dollar, weakness in the euro, and continuation of the move to equities in the light of the low interest rate levels of the major currencies.

“In Israel, the weakness in fuel prices contributes to a fall in demand for the dollar on the part of energy companies, while the wave of exits by local companies, resurgent exports, and incoming capital in foreign direct investment contribute to excess supply and are limiting the depreciation of the shekel.”