The shekel is strengthening sharply against the dollar today and is firm against the euro. In the morning interbank trade, the shekel fell by 0.92% against the dollar to 3.421 NIS/$, and against the euro by 0.10% to 3.562 NIS/€.
Yesterday, the Bank of Israel set the representative shekel-dollar exchange rate down 0.633% from Tuesday at 3.453 NIS/$, and the representative shekel-euro rate down 0.048% at 3.565 NIS/€.
The Bank of Israel increased the discount rate by 0.5%
The dollar is weakening against all major currencies in the global forex markets after the minutes of the latest meeting of the US Federal Reserve showed support for the moderation of interest rate hikes. The shekel has strengthened more than 4% against the dollar this month from 3,569/$ in early November.
Earlier this week, the Bank of Israel increased the interest rate by 0.5% to 3.25%. But Bank Hapoalim’s chief strategist Modi Shafrir believes that this is not the reason for the increase in the price of the Israeli currency.
He said that “(Raising the culture rate) will not have a noticeable effect, because the dollar-shekel exchange rate is currently influenced mainly by the processes taking place in the world stock markets, and in the long term, the main forces that support the strong shekel. Differences in interest rates do not have a significant impact on the shekel-dollar exchange rate today, especially when interest rate hikes in Israel are fairly synchronized with interest rate hikes in the United States.”
Indeed, Wall Street indices are rising this week, prompting Israeli institutional investors to buy shekels to hedge their positions abroad.
Globes, Israel business news – en.globes.co.il – published on November 24, 2022.
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