Today, the Israeli shekel witnessed a sharp decline in front of foreign currencies at the beginning of the week’s trading in the exchange market, directly due to the deterioration of the security situation in the country, the expansion of military operations in the Gaza Strip, in addition to escalating statements by the Houthis and Iran.
According to a report published by the newspaper “Globes”, the shekel decreased this morning by 0.47% against the dollar, to record a exchange rate of 3.603 shekels for the US dollar, and fell against the euro by 0.89% to 4.094 euro sins, in a sharp reflection of the positive direction that the market witnessed in late April, when the shekel jumped to levels below 3.60 creatures The dollar, levels that have not been recorded since early March.
Local risks behind the decline
The main economist at the Mizari Tafahout Bank, Ronin Menachem, explained that the current decline is not the result of global transformations but rather from local developments, and said: “The shekel is weakened by the escalating security tensions, the expansion of operations in Gaza, and Iranian and Houthi statements, as well as corrections after its recent rise from 3.81 to 3.60 sheep against the dollar. Rather, the dollar itself is weak globally, and this promotes the hypothesis by the decline of the shekel It stems from purely internal factors. “
Markets concern about military escalation
In turn, the CEO of Briko, Yossi Fraiman, stated that the security events, including summoning the reserve forces and canceling international flights, contributed to increasing demand for the dollar, and said, “Despite the weakness of the dollar globally as a result of positive economic data in the United States, security developments in Israel yesterday evening prompted investors to buy the dollar in anticipation of a possible economic crisis.”
Fraiman added that the shekel may return its strength in the event that additional security events do not occur, continuing: “This week is expected to pay wages, which prompts companies that deal with foreign currencies to transfer the dollar into a shekel to cover their obligations, which enhances the value of the local currency in the short term.”
Does the shekel return to the decrease?
The future path of the chicks exchange rate remains dependent on the developments of the security scene, according to Menachem, who warned that: “In the event that the intense battles in Gaza renewed, or the calm period towards the Houthis ended, or the confrontation with Iran has exacerbated, the exchange rate may rise to 3.80 shekels for the dollar or even more.”
It is noteworthy that the last weeks of last April had witnessed a wave of optimism in the Israeli market that reflected in the improvement of the shekel, but – according to what “Globes” confirmed – it seems that this optimism was premature.
