In afternoon inter-bank trading the shekel is strengthening against the US dollar and the euro. The shekel-US dollar exchange rate is down 0.49% at NIS 3.696/$, and the shekel-euro rate is down 0.59%, at NIS 3.996/€.
On Friday, the Bank of Israel set the representative rate of the shekel up 0.708% against the US dollar at NIS 3.697/$, and the shekel-euro rate was set 0.580% higher, at NIS 4.004/€.
Market sources believe that the reason for the relative calm in the forex market today lies in investors’ waiting for new developments in the political and security arena. Without a further trigger, such as an escalation on the security front or a further deterioration in political stability in Israel, there is currently no expectation in the market for foreign exchange turmoil. Foreign players, market analysts explain, are waiting for political clarity before undertaking additional deals.
Mizrahi Tefahot Bank chief economist Ronen Menachem tells “Globes,” “The market is very volatile, and it is difficult to form a clear forecast of where it will go now.” Menachem explains that the partial correction in the shekel exchange rate is not unusual, and it “corresponds with the sharp increases recorded today on the local stock exchange and with the expectation of a positive opening on Wall Street this evening.”
In the long term, most analysts expect the Israeli currency to strengthen. The latest currency forecast published by investment bank Goldman Sachs notes, “The political and security developments are the focus – the end of the ceasefire in Gaza and the dismissal of the head of the Shin Bet, have raised the local risk premium again. However, overall, we believe that there is potential for a significant appreciation of the shekel if the local risk premium declines and expectations for growth in the US recover.” Goldman Sachs see a rate of NIS 3.3/$ in the long term. In the short term, domestic developments are expected to continue to weigh on the currency and direct price movements.”
Published by Globes, Israel business news – en.globes.co.il – on March 24, 2025.
© Copyright of Globes Publisher Itonut (1983) Ltd., 2025.
