Economists Expect Dollar to Keep Rising

A Palestinian man exchanges currency, in the in city of Rafah the southern Gaza Strip, the U.S. dollar and shekel in black markets in the Gaza Strip.The Israeli newspaper Maariv reported on Wednesday by the debate between myself and the Israeli defence minister Ehud Barak and Prime Minister Benjamin Netanyahu, saying that Barak approved the dispatch of 100 million shekels to the banks without the knowledge of the Gaza Strip, Prime Minister Netanyahu.on April 8, 2009.She pointed out that Netanyahu's request for details of the validation that came after the money was sent to Gaza, Netanyahu explained that he wanted to examine the question of the future to send money to the sector.The newspaper said that 100 million shekels were allocated for the payment of salaries to Palestinian Authority by the aim of preventing the deterioration of the economic situation, noting that part of the amount will be sent to the staff of (UNRWA) in the Gaza Strip.Photo By ABED ABED / Flash 90
(Abed Abed/Flash90)

The rising dollar has a way to go, industry experts said this week. Closing at NIS 3.841/dollar on Thursday, a Calcalist survey of economists in Israel said that they expected the shekel to reach and even exceed the NIS 3.90 level in the coming weeks.

That would be good news for Israeli exporters, who often complain that they have difficulty competing in international markets because of the relative strength of the shekel versus the dollar. While shekel expenses for production remain constant, exporters get paid in dollars or euros, which are worth less in shekel terms when the Israeli currency is stronger. The Bank of Israel would also welcome increased “natural” strength for the dollar, so that it could cut back on its daily purchases of excess dollars in the market, a policy used to keep the shekel’s value from rising too high.

One reason for the shekel’s higher value in recent years has been the fact that interest rates in Israel were slightly higher than in the U.S., but with the Federal Reserve expected to raise rates throughout 2017 – perhaps as soon as December – investors are preparing to return to dollar investments, providing relief for the shekel.

Also contributing to the dollar’s strength is the prospect of a Hillary Clinton victory in the presidential elections. With polls showing Clinton ahead, especially in the electoral college vote, markets are “relaxing” somewhat, economists said, and factoring in the Clinton victory, which is preferred by markets.

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