The shekel was unchanged against the dollar, but weakened against the euro in morning inter-bank trading today. The shekel-dollar exchange rate was unchanged at NIS 3.463/$, and the shekel-euro exchange rate rose 0.26% to NIS 4.919/€.
"Why shouldn’t the shekel strengthen? Do you want an economic crisis so that the shekel will weaken? The dollar is weak against a group of currencies, and this is not Israel's private affair. You have a healthy and growing economy, people want to buy your assets, so naturally the local currency is strengthening," HSBC head of foreign exchange strategy David Bloom told "Globes" in an exclusive interview. "The psychological anxiety about the strengthening shekel will eventually break. When that happens, people will by shekels at much higher rates."
In May, Bloom predicted that the shekel-dollar exchange rate would be NIS 3.35/$ in the first half of 2012.
In international markets, the dollar has weakened 0.007% against the euro to $1.4201/€, and is trading at ¥80.14 against the Japanese yen.
"The dollar, the euro, the yen, and the pound are like the four ugly sisters, each of them has its flaws, and the ugliest of all is the American sister," said Bloom. As for the ongoing weakening of the dollar, Bloom believes that this is a long-term trend, due to the US's immense debt, which is only growing. "The dollar is the global reserve currency, and the US can afford to continue borrowing. The US tells the world, 'The dollar is ours - the problem is yours'.
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