Gaza escalation weighs on shekel
The shekel is weakening in the wake of the uncertainty in the security situation while the main indices on the Tel Aviv Stock Exchange (TASE) are down more than 1%, Trend reports with reference to Globes.
In afternoon inter-bank trading, the shekel-dollar exchange rate was up 0.77% against the dollar at NIS 3.276/$ and the shekel-euro rate was up 0.79% at NIS 3.986/€.
Yesterday, the Bank of Israel set the representative shekel-dollar rate 0.307% lower from Friday, at NIS 3.251/$, and the representative shekel-euro rate was set 0.421% higher, at NIS 3.955/€.
Leumi analysts Dudi Reznick and Kobby Levi said, "The shekel, as of the moment, is only slightly weaker and perhaps that indicates that trading will be more influenced by the global direction and less from the escalation in the south, as long as this does not spill over into a broader confrontation."
"In the trading arena, fast reacting sellers took advantage of foreign currency selling. Past experience teaches us that the weakening of the shekel around events due to geopolitical tensions is short-term and transient. Despite that, it could be that the worst of the situation is still to come and such escalation could further weaken the shekel. In our estimation, sellers should ready to sell dollars to take advantage of any jumps in the shekel exchange rate against the various currencies, in order to sell so as to hold shekels.
"Despite everything, it is worth remembering that the Israeli economy is very much benefitting from the opening up of the economy after the coronavirus crisis and the sharp rise in local demand. It could be that the current crisis in the south combined with the fall in markets worldwide means that in the medium term it might be a relatively convenient point of entry into the local stock market in the near future."