Shekel Down After FBI Clears Clinton

The shekel weakened against the dollar on Monday in response to the news that the FBI will not recommend prosecution of Democratic presidential nominee Hillary Clinton for security breaches in the email case, Globes reported.

Markets around the world have shown acute sensitivity to the ups and downs of the closing days of the election campaign, with analysts generally favoring a Clinton victory, which they think will spell a more stable economy.

FXCM Israel research head Moshe Shalom said on Monday that the shekel-dollar pair fell by about NIS 0.65 last week in a downward break through the NIS 3.80/$ level, and is now at its lowest since mid-October. The dollar collapsed globally as well last week, as polling results showed a close race between Trump and Clinton.

“Foreign exchange market players are now entirely concerned with the U.S. elections, and even the U.S. employment report released on Friday left hardly any impression. The number of new jobs was a little lower than forecast, but the unemployment rate remained at 4.9 percent, and the current report again indicated continued growth in wages and working hours.

“The strength of the dollar in recent weeks was largely due to the fact that the market estimated that Clinton would win the election. Now, with the uncertainty over the winner, many players are cutting their exposure to the U.S. dollar, making it weaker.

“Volatility around the election date is likely to be very high. A Trump victory could set off a chain reaction in the markets such as we saw following the Brexit vote in the U.K., and possibly even more severe, and to lead not only to a plunging dollar but to a fall in all risk assets,” Shalom said.