The shekel-dollar exchange rate fell 0.13% to NIS 3.55/$ in morning inter-bank trading today, after Federal Reserve Board Chairman Ben S. Bernanke left the Fed rate unchanged at 2% for second time. The shekel-dollar exchange rate is now traded at around its level of last April.
The shekel-euro exchange rate is unchanged at NIS 5.50/€.
The Fed cited both worries about inflation and weak economic activity in explaining its decision. Federal Open Market Committee officials said that they were worried about a further weakening in the job market and that the financial sector would continue to be under pressure.
The shekel-dollar representative exchange rate was set yesterday at NIS 3.556/$, up 0.36% on the day before, and the shekel-euro representative exchange rate was set at NIS 5.50/€, up 0.38%.
Online forex broker Finotech says that the shekel-dollar exchange rate is largely driven by the direction of the dollar in international markets. The shekel's current weakness is the inevitable result of the dollar's recovery against leading currencies. Good news for the shekel, such as the completion of the first stage toward joining the OECD, cannot counteract the larger trends.
Finotech also notes the $1.2 billion increase in Israel's foreign currency reserves to $32.5 billion. It predicts that the shekel-dollar exchange rate will continue to rise and sets the next important resistance level at NIS 3.65/$.
Published by Globes [online], Israel business news - www.globes-online.com - on August 6, 2008
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