The shekel is sharply weaker against the US dollar and the euro today. In afternoon interbank trade, the shekel-to-dollar rate rose 1.26% to 3.717 NIS/$, while the shekel-to-euro rate was 1.35% higher at 4.107 NIS/€.
Yesterday, the Bank of Israel set the representative Shekel-Dollar rate at 3.671 NIS/$, up 0.465% from Monday, and the representative Shekel-Euro rate at 4.052 NIS/€, up 0.223%.
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Ronen Menachem, Chief Economist of Mizrahi Tefahot Bank, says, “The shekel is depreciating sharply against the dollar and the euro today. An important reason is yesterday’s sharp declines on Wall Street and expectations that it will continue today. decrease, so they have to convert the shekels into foreign currency, which puts pressure on the shekel.”
“Furthermore, the political environment and the uncertainty surrounding the bailout deal matter. We know that when there are positive developments (the dollar is strengthening and stock indexes are rising) markets react positively, and this seems to be the case now. There is no progress either.” it is possible that the new talk of judicial reform has weakened the shekel, which before the war caused the shekel to depreciate by about 10%.
At the same time, you should not be excited by a change of a few tenths of a percent every day, because the currency is very volatile. As evidence, the shekel has actually strengthened by 2.4% against the dollar in the past month. Also, the new fiscal policy introduced by the Finance Minister, which limits the deficit to 4% of GDP for 2025, is likely to sway the Bank of Israel and credit rating agencies. This factor can support the shekel and compensate for some of the influences abroad.”
“My guess is that the shekel’s wide range will continue (NIS 3.60-3.80/$) depending on events in foreign markets and military and political events. The shekel can change direction quickly and strongly, so you should not get. daily and intraday excited by fluctuations.”
Globes, Israel business news – en.globes.co.il – published on September 4, 2024.
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