“We believe that last week’s stock market falls were a correction, not an about-face."
“We believe that last week’s falls were a correction and not an about-face. We think that psychological, rather than economic, factors were behind the falls in shares on international markets,” says Union Bank in its weekly market survey.
Union Bank says that the storms in the markets have raised expectations that the US Federal Reserve Board will cut the interest rate by year-end, while the Bank of Israel is expected to raise the interest rate. The bank nevertheless believes that the Bank of Israel will keep the interest rate unchanged at 3.75% for September.
The bank predicts that the shekel-dollar exchange rate is liable to continue to be highly volatile in the near term until the stock market storm abates. The bank predicts that the exchange rate will be traded at NIS 4.30-4.36/$ this week. The closest support level is NIS 4.30/$ and the closest resistance level is NIS 4.33/$ and the next one is NIS 4.394/$.
Published by Globes [online], Israel business news - www.globes.co.il - on August 5, 2007
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