Options trade is reflecting a higher shekel-dollar rate, with the rate rising 0.32% to NIS 3.487/$. Trading also is pointing to a euro-shekel rate of NIS 5.1583/€.
On Friday, the representative shekel-dollar exchange rate was set sharply lower at NIS 3.476/$, a fall of 1.7% from Thursday's rate. The euro-shekel representative rate of NIS 5.1539/€ was 1.29% lower than Thursday's setting.
Sources inform "Globes" that beginning Thursday afternoon, foreign investors were selling dollars, which pressured the exchange rate lower. The wave of selling began after the Bank of Israel had completed its daily dollar purchases of approximately $100 million.
The foreign exchange trading is currently affected by expectations that Governor of the Bank of Israel Prof. Stanley Fischer will raise Israel's interest rate this week, expectations that were strengthened by the higher than expected Consumer Price Index (CPI) reading for July. Higher local interest rates create higher demand for the shekel, as investors look to earn interest here.
Economists at Bank Leumi (TASE: LUMI) noted at the end of last week that the dollar purchases by the Bank of Israel, together with the dollar's global strengthening, will strengthen the dollar versus the shekel (and lead to a higher shekel-dollar exchange rate) in the short term.
Published by Globes [online], Israel business news - www.globes-online.com - on August 24, 2008
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