Despite the unexpected contraction in the Israeli economy in the first quarter and the continued fighting in the south, the shekel is stronger today.
The shekel is strengthening today against the dollar and against the euro. In afternoon inter-bank trading, the shekel-dollar exchange rate was down 0.31% at NIS 3.263/$ and the shekel-euro rate was down 0.43% at NIS 3.983/€.
Yesterday, the Bank of Israel set the representative shekel-dollar rate down 0.305% from Friday, at NIS 3.2730/$, and the representative shekel-euro rate was set 0.626% higher, at NIS 3.9998/€.
The shekel is strengthening today despite yesterday’s shock growth data from the Central Bureau of Statistics, which showed that the Israeli economy shrank 6.5% in the first quarter of 2021. Analysts had expected growth of 3-4% even though the country was in lockdown for much of the period.
But Mizrahi Tefahot Bank Chief strategist Modi Shafrir remained upbeat. He said, “In our estimation, the contraction in the first quarter is not indicative of an expected trend in the rest of the year and we expect a substantial acceleration in growth in the second quarter and throughout 2021,
Leumi Capital Markets strategist Dudi Reznick said that the shekel has been strengthening because the market believes that fighting between Israel and Hamas is coming to an end.
Published by Globes, Israel business news – en.globes.co.il – on May 19, 2021
© Copyright of Globes Publisher Itonut (1983) Ltd. 2021
Shekel Photo: ASAP Creative