The US rate hikes are not the major factor driving foreign exchange trading today in Tel Aviv.
The shekel is strengthening today against the dollar and against the euro. In afternoon inter-bank trading, the shekel exchange rate is down 0.97% against the dollar at NIS 3.422/$ and down 0.15% against the euro at NIS 3.758/€.
Yesterday, the Bank of Israel set the representative shekel-dollar rate down 0.547% from Tuesday, at NIS 3.456/$, and the representative shekel-euro rate was set down 0.019% at NIS 3.764/€.
Last night the US Federal Reserve announced a 0.25% rate hike. Fed Reserve chairman Jerome Powell said that there were signs that inflation is being tamed but although the size of rate hikes have been moderated, he gave no indication when the hikes will end.
But the US rate hikes are not the major factor driving foreign exchange trading today in Tel Aviv. The shekel is gaining strongly against the dollar, partly out of the continued global weakness of the US currency, and partly because of the strong gains on Wall Street over recent days, which continued after the Fed rate hike announcement, requiring Israeli investment institutions to buy shekels to hedge their overseas positions.
Concerns that the Israeli government’s planned judicial reform could harm the shekel have still not yet impacted forex trading.
Published by Globes, Israel business news – en.globes.co.il – on February 2, 2023.
© Copyright of Globes Publisher Itonut (1983) Ltd., 2023.
Shekel credit: Shutterstock Vladirina 32
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