Teva's acquisition of Barr Pharmaceuticals is expected to boost demand for foreign currency in the local market.
The shekel-dollar exchange rate rose 1% in inter-bank trading this morning to NIS 3.416/$, and the shekel-euro exchange rate rose 1.3% to NIS 5.432/€.
Foreign currency trading opened this week against the backdrop of Teva Pharmaceutical Industries Ltd.'s (Nasdaq: TEVA; TASE: TEVA) acquisition of Barr Pharmaceuticals Inc. (NYSE: BRL) for $7.5 billion. Bank Hapoalim (TASE: POLI; LSE:80OA) and Bank Leumi (TASE: LUMI) will lend Teva $1.8 billion to help finance the deal, which is expected to boost demand for foreign currency in the local market.
Foreign currency broker Finotech says that the Bank of Israel's intervention in the foreign currency market has not created the hoped for U-turn in the shekel's appreciation. Although the shekel has been weakening, volatility in the foreign currency market has increased. The Israeli economy, which until now has surprisingly been able to withstand the global credit crisis, is showing signs of slowing down. This reduces the likelihood of an interest rate hike.
Published by Globes [online], Israel business news - www.globes-online.com - on July 21, 2008
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