The shekel is firm against the dollar and against the euro in inter-bank trading today. The effect of the surprise decision by the Bank of Israel on Monday to cut the interest rate by 0.15% to a record low 0.1% had seemed to have faded yesterday as the shekel began strengthening. But then Bank of Israel deputy governor Dr. Nadine Baudot-Trajtenberg told "Reuters" that "I don't think that we have completely exhausted the interest rate tool, and we're certainly considering the use of other tools," and the shekel resumed its depreciation. But by mid-morning the shekel has regained some ground.
The shekel-dollar exchange rate is trading down 0.22% at NIS 3.929/$ and the shekel is trading down 0.11% against the euro at NIS 4.463/€.
Yesterday, the Bank of Israel set the shekel-dollar representative exchange rate at NIS 3.938/$, down 0.354% on yesterday's rate, and set the shekel-euro representative exchange rate at NIS 4.467/€, down 0.230%.
FXCM Israel research department said this morning, "The shekel-dollar exchange rate is trying to consolidate above the key NIS 3.95/$ level. Bank of Israel deputy governor Dr. Nadine Baudot-Trajtenberg helped give long traders an incentive yesterday when she hinted that there could still be more rate cuts and there could perhaps even be the more unconventional move of quantitative easing. On a technical level the next marker for the exchange rate is at the NIS 3.97/$ level. Breaking above this level will pave the way for a renewed testing of the NIS 4/$ psychological barrier. It seems that that is the direction that the Bank of Israel is looking for and if the exchange rate approaches that level then we certainly could see the Bank of Israel intervening on trading to help the breakthrough."
Published by Globes [online], Israel business news - www.globes-online.com - on February 26, 2015
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