Despite its current weakness, HSBC sees the shekel strengthening to 3.6 NIS/$ by the end of 2024 and 3.4 NIS/$ by the end of 2025.
The shekel is steady against the US dollar and euro today after a week of heavy losses. In afternoon interbank trade, the shekel-to-dollar rate was down 0.04% at 3.761 NIS/$, while the shekel-to-euro rate was unchanged at 4.155 NIS/€.
Yesterday, the Bank of Israel set the representative shekel-dollar exchange rate at 3.763 NIS/$, up 0.293% from Monday, and the representative shekel-euro exchange rate at 4.154 NIS/€, up 0.275%.
The shekel is trading at its weakest level against the US dollar in a month as sharp declines in US stock markets forced Israeli institutional investors to sell the shekel and buy foreign currency to hedge their positions. Continued tensions in the north and diminished hopes for a hostage deal also led to a weakening of the Israeli currency.
But HSBC urges investors to bet on the shekel. In its weekly report, Leader Capital Markets cites an HSBC report that indicates the shekel will strengthen to 3.60 NIS/$ by the end of 2024 and 3.40 NIS/$ by the end of 2024. Israel and its conservative monetary policy, compared to the expectation of interest rate cuts in Western countries. The market is likely priced in a 0.25% cut by the US Federal Reserve next week.
Globes, Israel business news – en.globes.co.il – published on September 11, 2024.
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Shekel credit: Shutterstock Vladirina 32
