Atrade: Attack on Iran could cause economic catastrophe

"Many economists believe that an attack on Iran is liable to deal a serious blow to the Israeli economy," said foreign current trader Atrade today. "An uncoordinated attack is liable to cause an economic catastrophe that will include a severe recession and sharp depreciation of the shekel."

After strengthening in initial inter-bank trading today. The shekel-dollar exchange rate is up 1.01%, compared with Friday's representative rate, to NIS 4.004/$, and the shekel-euro exchange rate is up 1.30% to NIS 4.97/9�.

Atrade notes, "The Bank of Israel has more than $70 billion in foreign currency reserves, which it could use if necessary to keep the exchange rate stable."

Atrade adds, "On the basis of a technical analysis, we believe that the Iranian issue will put pressure on the shekel this week. A breakthrough the NIS 4/$ level could lead to a jump to around NIS 4.05/$. Our next target for this week is $4.10."

"If the shekel-dollar exchange rate cannot stabilize at around NIS 4/$, we can expected trading at NIS 3.92-4/$."

Published by Globes [online], Israel business news - www.globes-online.com - on August 13, 2012