The shekel is strengthening considerably against the US dollar. The shekel-dollar rate is currently 3.7612/$, down 1.49% from the representative rate of NIS 3.818 seen last Thursday. The main reason for the fall in the exchange rate is the progress in negotiations for the release of Israeli hostages held by Hamas in the Gaza Strip.
The shekel-dollar rate has been very volatile lately, a function of the varying intensity of the fighting in the Gaza Strip and tensions on Israel’s northern border and with Iran. Relative quiet and rumors that hostages are about to be released strengthen the shekel, while flare-ups and hiatuses in the hostage negotiations weaken it.
The rise in the shekel-dollar rate last week, and the decline on the Tel Aviv Stock exchange, stemmed mainly from fears that the conflict on Israel’s borders would widen, with consequences for the price of oil. The rate of NIS 3.81/$ that the shekel reached at the end of last week, represented depreciation of 6.5% in two months.
The shekel-dollar rate is also affected by trends on US stock markets. When stock markets in the US rise, Israeli financial institutions, which are heavily invested in those markets, become more exposed to the dollar, and therefore sell dollars and buy shekels to cover that exposure. Last week, the Dow Jones Industrial Average rose 0.7%, the S&P 500 rose 2.7%, and the Nasdaq rose 4.2%, following three weeks of declines.
Published by Globes, Israel business news – en.globes.co.il – on April 30, 2024.
© Copyright of Globes Publisher Itonut (1983) Ltd., 2024.
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