www.bethelfinance.com
The shekel is weakening against both the dollar and euro in morning inter-bank trading today. The shekel-dollar exchange rate is up 1.25%, compared with yesterday's representative rate, at NIS 3.8028/$ and the shekel-euro exchange rate is up 1.54% at NIS 5.1074/€. The last time the shekel-dollar rate rose above 3.8 was in December last year.
The main reason for the weakening of the shekel is the sharp falls on the Tel Aviv Stock Exchange yesterday, with foreign investors selling shares in shekels and converting the shekels to dollars, causing the exchange rate to rise. The continuing tension with Iran is also a factor contributing to a weaker shekel, causing foreign investors to reduce risk, as they perceive it.
G20 leaders gathered Saturday night in Mexico City to discuss the global economic situation, specifically the Eurozone's stumbling economy, and reached agreement in principle to provide a broad bailout package for Europe worth $2 trillion. The agreement was reached after Germany's withdrew its opposition to the move.
The Bank of Israel's Monetary Committee, headed by Governor of the Bank of Israel Prof. Stanley Fischer, will leave the interest rate for March at 2.5% this afternoon, senior economic analysts unanimously predict in a "Bloomberg" survey (all 24 analysts said they saw no change). The committee lowered the interest rate for February by 25 basis points, the fourth reduction in the past 12 months.
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