The shekel-dollar exchange rate is up 0.16% in morning trading at NIS 3.5485/$, while the shekel-euro rate is down 0.4% at NIS 5.5023/€.
Foreign currency is trading against the backdrop of today's interest rate announcement by US Federal Reserve chairman Ben Bernanke, who is widely expected to leave the interest rate unchanged at 2%, which will mean that the gap between the interest rates in Israel and the US will remain at 2% as well.
Locally, ''Globes'' reported yesterday that the Bank of Israel has stepped up the rate of its foreign currency purchases. The central bank's foreign currency reserves stood at $32.5 billion at the end of July, an increase of $1.2 billion compared with a month earlier. The Bank of Israel has now purchased $1.43 billion over the last two months.
The shekel-dollar representative rate was set 0.797% higher yesterday at NIS 3.543/$, and the shekel-euro representative rate was set 0.961% higher at NIS 5.5246/€.
Online foreign currency broker Prico says the influx of foreign currency from the business and financial sectors has sent the shekel-dollar rate up to NIS 3.53/$, and that the shekel-dollar rate has strong support at the NIS 3.38-3.43/$ range, which will prevent it from falling to previous lows.
In the short-term, the potential for devaluation of the shekel has not run its course and that the shekel-dollar rate can rise to NIS 3.56-3.58/$. Should it break through the NIS 3.62/$ level, it could reach the recent high of NIS 3.66/$. A breakthrough of the previous high will support an upward surge towards NIS 3.80/$, Prico adds.
Published by Globes [online], Israel business news - www.globes-online.com - on August 5, 2008
© Copyright of Globes Publisher Itonut (1983) Ltd. 2008