A day after the warning from Moody's that the break-up of the Israeli governing coalition is "credit negative", and the negative inflation reading for November, the shekel has weakened against the US dollar and the euro this morning on the local foreign exchange market. The shekel-dollar exchange rate is up 0.25% in comparison with yesterday's representative rate, at NIS 3.9298/$, while the shekel-euro rate is up 0.43%, at NIS 4.8909/€.
Yesterday, the shekel-dollar representative rate rose 0.4%, to NIS 3.919/$, and the shekel-euro representative rate rose 0.3%, to NIS 4.87/€. The dollar is weakening against other major currencies on world markets.
"It is too early to tell whether the downward correction in the shekel-dollar exchange rate has ended, and it could well be that we shall see further falls in the coming weeks," says FXCM Israel in its market review today. "The dramatic and unforeseen drop in the price of oil is starting to threaten the stability of the financial markets and could drag share prices downwards.
"The tendency of investors to take profits towards the end of the year and reduce their exposures is affecting the trend in the dollar on world markets, and against the shekel. If we see the shekel-dollar rate climb above NIS 3.95/$, this could encourage more speculators to join in the rise, although it's hard to believe that the pair could challenge the key NIS 4/$ level before the end of the year. On the other hand, a fall below NIS 3.9/$ will only accelerate the fall and will signal a continuation of the correction," FXCM concludes.
Published by Globes [online], Israel business news - www.globes-online.com - on December 16, 2014
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