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Shekel-euro rate down sharply after Draghi QE announcement

In the wake of today’s dramatic announcement of a larger than expected quantitative easing program by Mario Draghi, president of the European Central Bank, the shekel-euro rate has dipped sharply, and is currently 1.18% below the representative rate set this afternoon, at NIS 4.5226/. The shekel-dollar rate is up slightly, at NIS 3.9372/$ .

The European Central Bank will buy bonds to the tune of 60 billion monthly until September 2016, injecting 1.1 trillion into the European economy. The European Central Bank is also holding its interest rate at 0.05%.

Analysts are fairly unanimous in saying that the quantitative easing program by itself will not pull the European economy out of the doldrums. “This is a positive step that will support low yields in the euro bock countries (and will also have a beneficial effect on US bonds) and a further weakening of the euro, but unless it is combined with structural changes, reforms in the labor market, and deregulation, in major economies such as France and Italy, it’s hard to see economic activity in Europe picking up,” writes Leader Capital Markets analyst Yonatan Katz.

Published by Globes [online], Israel business news – www.globes-online.com – on January 22, 2015

Copyright of Globes Publisher Itonut (1983) Ltd. 2015

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