Despite the ongoing war, the Israeli currency has strengthened by 6.6 percent since the beginning of November. against the US dollar. The shekel is also gaining against the euro.
The shekel is gaining strongly against the dollar and is also strengthening against the euro. In morning interbank trading, the shekel to dollar exchange rate is 1.73 percent higher. lower and amounts to NIS 3.767/$, and the shekel to euro exchange rate is 0.36 percent. lower at NIS/€4,095. Yesterday, the Bank of Israel reduced the representative shekel rate to the dollar by 0.879%, to NIS 3.833/$, and the representative shekel rate to the euro by 0.544%, as of Monday. lower at NIS 4,110/€.
The shekel bounces back
Despite the ongoing war with Hamas in Gaza and the escalation in the north, the shekel is currently at its strongest level against the US dollar since mid-August. Since the beginning of November, the Israeli currency has strengthened by 6.6%. against the dollar and at one point it was quoted at NIS 3.75/$. This was partly due to the weakening dollar in global markets and the latest US inflation data being lower than expected, bringing potential interest rate cuts closer.
This week it will announce Israel’s CPI for October. Assuming that it will be much lower than the CPI increase of 0.6%. in October 2022, analysts expect inflation to decline from the current level of 3.8%. up to 3.5 percent
The shekel was also boosted by an economic survey conducted earlier this week by ratings agency S&P, which forecast the Israeli economy returning to strong growth at 5%. in 2025, after an increase of 1.5%. this year and 0.5 percent next year, provided the war does not escalate.
S&P added that an actual downgrade of Israel’s credit rating over the next 12-24 months is only likely if the impact of the conflict on Israel’s economic growth, fiscal situation and balance of payments is more significant than the company expects, or if the conflict significantly expands.