The local foreign exchange market has given its first reaction this morning to last week’s disappointing US jobs report. The The shekel-dollar exchange rate is currently down 0.9% in comparison with Thursday’s representative rate (the last time representative rates were set before the start of the Passover holiday), at NIS 3.9203/$ , while the shekel-euro rate is up 0.59%, at NIS 4.3026/.
Just 126 thousand new jobs were added to the US labor market in March. This compares with a forecast of 245 thousand, and comes after 295 thousand jobs were added in February. The US unemployment rate remains at 5.5%, as expected.
FXCM Israel says in its market review this morning, “The shekel-dollar rate is falling in response to Friday’s disappointing employment figures from the US. The figures are the worst since 2013, arousing fears that the US economy is losing momentum, and cooling expectations of an interest rate hike in the US. If we see a continued decline in the next few months in the rate of creation of new jobs in the US, the Federal Reserve will have to defer its planned interest rate hike. Even in its most hawkish statements, the Federal Reserve has stressed that any interest rate rise depends on consistent improvement in the labor market.
“The disappointing jobs figure could be a signal for a sharp correction both in share indices and in the dollar on world markets. The shekel-dollar pair is now close to NIS 3.9/$ . A fall below this level could accelerate towards NIS 3.87/$ , and if this happens it is certainly conceivable that the Bank of Israel will intervene in trading in an attempt stem the decline.”
Published by Globes [online], Israel business news – www.globes-online.com – on April 6, 2015
Copyright of Globes Publisher Itonut (1983) Ltd. 2015