The shekel is strengthening today against the dollar and weakening against the euro. In afternoon inter-bank trading, the shekel-dollar exchange rate is up 0.31% against the dollar at NIS 3.572/$ and down 0.48% against the euro at 4.197/€.
On Monday, the Bank of Israel set the shekel-dollar representative rate up 0.533% at NIS 3.583/$ from Friday's rate and set the shekel-euro rate up 0.149% at 4.177/€.
The shekel is stronger today against the dollar, which is at a seven week low against a basket of the world's major currencies, reports "Reuters," as fears of a trade war between the US and China recede, giving investors an increased appetite for risk. The shekel is trading against the dollar at levels not seen since early June.
The shekel is stronger against the dollar even though the Central Bureau of Statistics reported earlier this month that the August Consumer Price Index (CPI) rose only 0.1%, less than predicted. This was the second successive month that inflation in Israel fell below the economic experts' forecasts and with annual inflation slipping to 1.2%, at the lower end of the government's 1%-3% annual target, the much anticipated interest rate hike could be postponed until early next year.
The Bank of Israel has kept interest at its historic low of 0.1% since March 2015. With the US Federal Reserve expected to announce two more interest rate hikes this year, the gap between shekel and dollar interest is widening.
Published by Globes [online], Israel business news - www.globes-online.com - on September 20, 2018
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