The shekel is weakening today against the dollar and against the euro. In early afternoon inter-bank trading, the shekel-dollar exchange rate is down 0.29% against the dollar at NIS 3.5796/$ and down 0.39% against the euro at 4.3584/€, Globes reports.
Yesterday, the Bank of Israel set the shekel-dollar representative rate up 0.814% from Tuesday's exchange rate at NIS 3.590/$ and set the shekel-euro rate up 0.582% at 4.375/€.
The shekel has ended the slide of recent weeks but remains at levels against the dollar not seen since early September 2017. There are concerns about the widening interest rate between the shekel and the dollar with the US Federal Reserve planning another two or three rate hikes this year while the Bank of Israel has said it will not raise interest rates from the historic low of 0.1% until the end of the year. With inflation in Israel running at 0.2% annually, still well below the government target of 1%-3% there are many who are skeptical that the Bank of Israel will make a rate hike this year at all.
There are also concerns that the Israeli economy is entering a slowdown as signified by the recent fall in housing prices. But otherwise there is little data to indicate that the Israeli economy won't continue to grow by more than 3% per year, as forecast.