This week the dollar plunged to a 10-year low against the shekel and is now trading at around NIS 3.70/$. Where will it head now? Yesterday Meitav Group conducted a poll by SMS on behalf of "Globes" among senior investment advisers who were asked for their views on where the dollar is headed now. Their answers reveal that they do not expect a marked change in the near future.
Nearly half of the investment advisers polled (48%) believe the dollar's current low is merely a stopover point en-route to even lower prices. They expect the dollar to fall below NIS 3.70/$. Only 19% expect the dollar to hold steady against the shekel at the rate it has been at in recent weeks, NIS 3.70-3.80/$. One third of the advisers voiced optimism about the dollar and see the current level as a low point from which it can only rise. They expect the dollar to strengthen to more than NIS 3.80/$.
The dollar's weakening is not limited solely to the shekel. It slid against the euro, for example, to $1.48/€, although it underwent a slight correction this morning, starting the day at $1.46/€. This was not the result of the dollar rallying but rather a pessimistic outlook for slower growth in the euro block, coupled with fears that the US crisis is having a greater impact on Europe than economists originally thought.
The shekel weakened slightly against the dollar in morning trading to NIS 3.74/$.
The dollar's performance in the immediate future will be affected by the upcoming interest rate decision by the US Federal Reserve Board. Economists have been calling on Fed chairman Ben Bernanke to make a steep 75 basis point cut even before the upcoming meeting of the Federal Reserve Board Open Market Committee at the end of the month. If Bernanke does make such a cut, it could put yet more downward pressure on the shekel-dollar rate.
Published by Globes [online], Israel business news - www.globes.co.il - on January 17, 2008
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