The shekel has continued to perform strongly against the dollar and the euro in morning trading. The shekel-dollar rate has reached its lowest level since the representative rate of NIS 3.967/$ in October 1998.
The shekel has appreciated 0.36% against the dollar to NIS 3.959/$, and 0.17% against the euro to NIS 5.369/€, in interbank trading.
The fall in the shekel-dollar rate is attributed to the mixed trend in trading on global currency markets, and the continued resolve by the Bank of Israel not to intervene in the local currency market, especially given that the current trend in the dollar is global.
The US Federal Reserve has, as expected, kept its main interest rate on hold at 5.25%. The Fed's Open Market Committee said that "core inflation remains somewhat elevated although inflation pressures seem likely to moderate over time."
Online foreign currency trading firm Easy Forex says the market expects the Bank of Israel to make a cut of at least 25 basis points in its interest rate decision this month. Another factor that could affect the exchange rate at least over the short-term is the publication of the testimonies of Prime Minister Ehud Olmert, Minister of Defense Amir Peretz and former IDF Chief of Staff Dan Halutz to the Winograd Inquiry on the second Lebanon war.
Published by Globes [online], Israel business news - www.globes.co.il - on May 10, 2007
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