The shekel is strengthening today against the dollar and against the euro. In early afternoon inter-bank trading, the shekel-dollar exchange rate is down 0.63% against the dollar at NIS 3.687/$ and down 0.10% against the euro at 4.273/€, Globes reports.
Yesterday, the Bank of Israel set the shekel-dollar representative rate up 0.270% at NIS 3.710/$ from Friday's rate and set the shekel-euro rate down 0.051% at 4.277/€.
For the past two forex trading days, the Bank of Israel set the shekel-dollar exchange rate above NIS 3.70/$ for the first time in 18 months. The dollar has been strong on international forex markets due to concerns about a trade war between the US and China.
On the other hand, the shekel can expect to benefit from S&P's decision on Friday to raise Israel credit rating to AA-. Prico Group CEO Yossi Fraiman said, "The raising of Israel's credit rating is a very significant event for the foreign exchange market in Israel, chiefly because a rating in the AA group puts Israel into the investment category for countries and very large investment institutions around the world, opening the door for significant amounts of new capital investment."
Last week, Israel's Ministry of Finance warned that second quarter growth slowed to 2-2.5% in the second quarter after being above 4% in the three previous quarters. However, the Ministry of Finance added that the sluggish growth was only a temporary correction due to a sharp fall in car imports after very strong car imports in the first quarter.