Gift Asset Management Ltd. predicts that the shekel-dollar exchange will be between NIS 4.15/$ and NIS 4.45/$ in 2007. In the immediate term, the support level for the shekel-dollar exchange rate will be NIS 4.20/$ and the resistance level will be NIS 4.24/$.
Gift said, “The Bank of Israel has said that it will again cut the interest rate next year in the event that the inflation rate does not begin to climb towards 1.5%. In addition, the interest rate gap is not the only factor affecting the exchange rate, so it cannot be ruled out that the shekel-dollar exchange rate will again trade around NIS 4.20/$ or even lower.”
Gift added that passage of the 2007 budget and the broadening of the coalition are keeping the government stable for the moment, and enable Israel to continue to benefit from the foreign investment that is flooding into emerging markets. This situation is conditional on no serious deterioration in the fragile security situation.
Gift also noted, “A further weakness in the dollar against leading international currencies during 2007 will likely contribute to a shekel appreciation.”
Published by Globes [online], Israel business news - www.globes.co.il - on December 31, 2006
© Copyright of Globes Publisher Itonut (1983) Ltd. 2006