The shekel weakened against the dollar and the euro in trading this morning. The shekel-dollar rate rose more moderately, after trading in foreign currency options yesterday priced in a rise in the shekel-dollar rate, by a more sizable 0.4%.
Last Friday, the shekel-dollar rate plummeted by almost 2% in response to the 1.5% rise in the Consumer Price Index (CPI) in April. Governor of the Bank of Israel Stanley Fischer is now widely expected to raise the interest rate next Monday, an increase that could strengthen the shekel against the greenback even further.
The shekel-dollar is up 0.21% at NIS 3.369/$ in interbank trading this morning, and the shekel-euro rate is up 0.89% at NIS 5.204/€. The shekel-dollar rate was set 1.8% lower at NIS 3.362/$ on Friday, and the shekel-euro representative rate was set 1.9% lower at NIS 5.204/€.
Easy Forex says the breach of the NIS 3.40/$ level is a technical signal of further falls, which could mean the shekel is headed for NIS 3/$. Prico says the shekel is likely to strengthen further against the dollar, and will reach NIS 3.25/$.
Published by Globes [online], Israel business news - www.globes-online.com - on May 19, 2008
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