Shekel hits three-month weakest against dollar
The shekel weakened today against the dollar and against the euro. The Bank of Israel set the representative shekel-dollar rate today up 0.791% from Thursday, at NIS 3.566/$, and the representative shekel-euro rate was set 0.158% higher at NIS 3.794/€.
The shekel is trading at its weakest against the US currency since early November and over the past month it has depreciated 5% against the dollar.
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According to Prico Risk Management and Investments CEO Yossi Fraiman the weakening of the shekel against the dollar is due to several factors. Firstly, he says, the strength of the dollar, with the dollar index is at a six-week high against the basket of the world’s major currencies.
Fraiman says, “Statements by senior officials at the US Federal Reserve about the need to curb inflation as well as high US manufacturing, price index and sales data have led to declines on Wall Street, which has resulted in activity by Israeli investment institutions that have restarted buying dollars.”
At the same time, Fraiman explains, the upheaval surrounding the Israeli government’s planned judicial reform is also weighing on the Israeli currency. “In Israel money is continuing to flow out of local banks amid concern among investors about the effect of the judicial reform on a range of issues.”
A resistance point that will test forex traders, says Fraiman, will be NIS 3.62/$.
On Monday, the Bank of Israel Monetary Committee will announce an interest rate hike in its efforts to tame inflation. Analysts had expected a 0.25% hike to 4%. But the weakening of the shekel, which increases prices of imported goods, as well as higher than expected inflation data, which has pushed annual inflation in Israel up to 5.4%, has resulted in analysts predicting that there will now be a 0.5% hike.
Published by Globes, Israel business news – en.globes.co.il – on February 17, 2023.
© Copyright of Globes Publisher Itonut (1983) Ltd., 2023.
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