The shekel is strengthening today against the dollar and against the euro. In late morning inter-bank trading, the shekel-dollar exchange rate is down 0.22% against the dollar at NIS 3.572/$ and down 0.04% against the euro at 4.186/€, Globes reports.
Yesterday, the Bank of Israel set the shekel-dollar representative rate up 0.449% from Tuesday's exchange rate at NIS 3.580/$ and set the shekel-euro rate down 0.556% at 4.188/€.
The dollar is weaker today on global markets after the minutes of the US Federal Reserve meeting earlier this month were published. The Fed indicated it was moving towards a less accommodating strategy of helping the US economy with low interest rates. The Fed is expected to raise interest rates next month and once or perhaps twice more this year, widening the interest rate gap with the shekel.
The Bank of Israel cut the interest rate to a historic low of 0.1% in March 2015 but is expected to start raising it again in the final quarter of 2018. Although in theory this low interest should be weakening the shekel, the Israeli currency is strong, reflecting the dynamic nature of the Israeli economy, which is growing by more than 4% annually.