Prico: The shekel will appreciate against the dollar on expectations of another interest rate hike.
Foreign currency trading is mixed today. The shekel-dollar exchange rate fell 0.16% to NIS 3.57/$ by midday in inter-bank trading, but the shekel-euro exchange rate rose 0.28% to NIS 5.266/€. Both movements are reversing recent trading trends in the currencies.
The Bank of Israel today published the State of the Economy Index, which fell 0.3% in July, indicating that the economy is slowing.
Online foreign currency broker Prico says that the jump in the Consumer Price Index (CPI) for July is signaling traders that another interest rate hike is likely, which is causing the shekel to appreciate against the dollar. This movement is still limited within the technical support level of NIS 3.53/$ and NIS 3.48/$. Any movement beyond these levels could send the shekel-dollar exchange rate down to NIS 3.38-3.43/$.
Published by Globes [online], Israel business news - www.globes-online.com - on August 20, 2008
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