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Shekel strengthens after surprise US Fed rate cut

Israel Materials 4 March 2020 09:44 (UTC +04:00)

The shekel is strengthening against the dollar and against the euro after the US Federal Reserve unexpectedly cut the interest rate by 0.5% to a 1% to 1.25% range, Trend reports with reference to Globes.

This is an emergency measure by the Fed as the coronavirus spreads worldwide stoking recessionary fears

The Fed said in a statement, "The fundamentals of the US economy remain strong. However, the coronavirus poses evolving risks to economic activity. In light of these risks and in support of achieving its maximum employment and price stability goals, the Federal Open Market Committee decided today to lower the target range for the federal funds rate."

The US Fed, headed by Chair Jerome Powell, said the decision was unanimous. The Fed management was not due to meet until the middle of the month, so the timing demonstrates how urgent the threat of the coronavirus outbreak is being taken.

In early evening futures contracts, the shekel exchange rate is down 0.94% against the dollar at NIS 3.428/$ and down 0.11% against the euro at NIS 3.859/€.

This afternoon, the Bank of Israel set the representative shekel-dollar rate down 0.173% from Thursday at NIS 3.461/$, and the representative shekel-euro rate was set up 0.639% at NIS 3.844/€.

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