Shekel strengthens further against dollar

The shekel has strengthened sharply against the US dollar following the disappointing jobs figures released in the US on Friday. The representative shekel-dollar rate was set 0.45% lower today, in comparison with Thursday’s rate (the last time representative rates were set before the start of the Passover holiday), at NIS 3.956/$ , and the representative shekel-euro rate was set 0.02% lower, at NIS 4.2775/. Following the setting of the representative rates, the shekel continued to strengthen against the dollar, and the shekel-dollar exchange rate is currently a further 1.2% down, at NIS 3.9102/$ . Against the euro, the shekel is currently weaker by 0.83%, at NIS 4.313/.

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

Shekel-dollar rate sinks

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

Rate decision sends shekel-dollar below NIS 4/$

The Bank of Israel’s decision to leave its key lending rate unchanged for April at 0.1%, and to refrain from a quantitative easing program, at least for the time being, has sent the shekel-dollar rate tumbling to below NIS 4.

After the representative shekel-dollar rate was set at NIS 4.018 this afternoon, already 0.86% below Friday’s rate, the exchange rate is now an additional 1.32% lower, at NIS 3.9648.

The representative shekel-euro rate was set at NIS 4.3737/€ this afternoon, 1.04% higher than Friday’s rate, but since the interest rate announcement the rate has fallen back 0.78%, to NIS 4.3397.

Published by Globes [online], Israel business news – www.globes-online.com – on March 23, 2015

© Copyright of Globes Publisher Itonut (1983) Ltd. 2015

Shekel mixed as rate decision tensely awaited

As the market awaits the Bank of Israel’s interest rate decision for April, the shekel has had a mixed opening against the major currencies this week. The shekel-dollar rate is currently down 0.4% in comparison with Friday’s representative rate, at NIS 4.0368/$ , while the shekel-euro rate is up 0.64%, at NIS 4.3562/€.

At 16:00 today, the Bank of Israel will announce the interest rate decision, against the background of a survey by HSBC last week according to which the central bank will lower the rate into negative territory and will launch a quantitative easing program of purchases of government bonds. The Tel Aviv Stock Exchange has risen sharply in response to HSBC’s assessment.

FXCM Israel says in its market review this morning, “The shekel-dollar pair opens the trading week above the NIS 4.05/$ resistance level, and is traded at its highest level since August 2012. The pair’s breakthrough upwards took place against the background of HSBC’s assessment that the Bank of Israel will launch a quantitative easing program and cut its interest rate to a negative level.

“This review shook up the local market (bonds, stocks, foreign currency) and led speculators to push the pair higher. This reflex response by the speculators, however, will face a test in today’s interest rate decision, with the probability that the Bank of Israel will really announce these two unprecedented and dramatic steps not high.

“If the Bank of Israel does not fulfill the market’s expectations, based on HSBC’s prediction, today, the shekel-dollar rate can be expected to correct sharply downwards. We estimate that the Bank of Israel will leave its interest rate unchanged today, and will wait at least another month in order to gauge the effect of its recent interest rate cuts. It could certainly be, however, that in the policy statement we shall see a more explicit signal about the bank’s intentions on quantitative easing. If the Bank of Israel does embark on a quantitative easing program, that will undoubtedly make the depreciation of the shekel more extreme. In the end, there is no doubt that the gap between the policies of the central banks in Israel and in the US will lead to a continued rise in the shekel-dollar exchange rate in the near term. It could be, however, that the market jumped too high last week. The next target is the August 2012 peak of NIS 4.07/$ .”

Published by Globes [online], Israel business news – www.globes-online.com – on March 23, 2015

© Copyright of Globes Publisher Itonut (1983) Ltd. 2015

Shekel weakens against dollar after February CPI

The shekel continues to weaken against the US dollar, following the release of the Consumer Price Index reading for February yesterday, which showed a surprise 0.7% drop. The shekel-dollar rate has risen by 0.38% this morning, in comparison with Friday’s representative rate, to NIS 4.0302/$ . The shekel-euro rate is down by the same margin, at NIS 4.2459/€.

US investment bank Goldman Sachs predicts that the dollar-euro rate will reach parity within the next six months, and will fall to $ 0.80/€ by the end of 2017, a year after the European Central Bank is expected to end its quantitative easing program.

The Federal Open Market Committee of the US Federal Reserve is due to announce its interest rate decision on Wednesday. Following better than expected US job figures for February, expectations have risen of an interest rate rise in the US in September, and the Federal Reserve’s announcement this week will be closely scrutinized for hints in this direction.

Tamir Fishman Mutual Funds CEO David Katash says that the drop in the CPI in February justifies the Bank of Israel’s decision to cut its interest rate to 0.1%. “It looks as though the Bank of Israel will have to take further action to encourage growth in the economy, and that the interest rate tool by itself is not enough,” Katash said.

Published by Globes [online], Israel business news – www.globes-online.com – on March 16, 2015

© Copyright of Globes Publisher Itonut (1983) Ltd. 2015

Shekel-euro rate continues to slide

The shekel has strengthened against the major currencies this morning. The shekel-dollar rate, which broke through the NIS 4/$ barrier yesterday, has retreated slightly, by 0.28% compared with yesterday’s representative rate, to NIS 4.0058/$ , while the shekel-euro rate continues to slide, and is down 0.95%, at NIS 4.328.

On world markets, the euro has weakened by about 0.4% against the US dollar, and is traded around $ 1.07/€, a 12-year low.

Meitav Dash chief economist Alex Zabezhinsky says in an interview with “Globes” that the Bank of Israel erred in lowering its interest rate to 0.1% for March. He says that bank’s Monetary Committee underestimates the risks in the real estate and corporate bond markets, and that the benefits of its decision do not justify the risks involved.

FXCM Israel says in its market review this morning, “Conditions still support an upward trend in the shekel-dollar pair and consolidation above the NIS 4/$ threshold. As long as it remains above NIS 3.97/$ , the likelihood of further rises is high. What made the pair to retreat was the halt in the dollar’s rise on global markets, which caused speculators in the local market to take profits. The dollar now has a following wind from the better than expected US employment report released on Friday, and the world dollar index is at a peak of 11.5. Several technical analysts argue that the dollar is over-bought, and that there is a strong likelihood of a correction. Nevertheless, we reiterate our view that market conditions support continued appreciation of the dollar and consolidation of the shekel-dollar rate above NIS 4/$ .”

Published by Globes [online], Israel business news – www.globes-online.com – on March 10, 2015

© Copyright of Globes Publisher Itonut (1983) Ltd. 2015

The Ticker / Dollar, euro surge further following Bank of Israel’s rate cut

Both the U.S. dollar and the euro strengthened further against the shekel on Tuesday after the Bank of Israel announced a cut to its base interest rate on Monday from 0.25% to 0.1%, carried out in part to lower the value of the shekel. Tuesday, the representative rate of the dollar was set at 3.952 shekels, up 2.44% on the day, while the euro rate was set at 4.478 shekels, a rise of 2.68%. Israeli export firms regularly push for steps to undercut the strength of the shekel to make exports more competitive. Israel Discount Bank economist NIra Shamir commented that strength of the shekel has been based on “strong fundamentals” including accelerated economic activity in Israel, adding the Israeli currency is expected to rise in value in the future, but she said, “The Bank of Israel is signaling that it is prepared to join the global currency wars,” referring to competition among countries to devalue their currencies. (Dror Reich)

Teva announces success in test of new drug chronic migraine drug

Teva Pharmaceutical Industries announced on Tuesday that it has obtained positive results from a study evaluating doses of TEV-48125, a drug the Jerusalem-based company is developing for the treatment of chronic migraines, defined as migraines occurring on at least 15 days per month. The study revealed what Teva called “a significant and clinically relevant reduction” in headaches. “Chronic migraine is a challenging, complex and highly debilitating condition that desperately needs effective new treatment options,” said Michael Hayden, Teva’s President of Global R&D and Chief Scientific Officer. The World Health Organization ranked chronic migraines No. 4 in its list of debilitating conditions. In the United States alone, 3.2 million people, most of them women, suffer from chronic migraine headaches. (Yoram Gabison)

Allot Communications to acquire operations of Madrid-based Optenet

Hod Hasharon-based Allot Communications, which develops Internet traffic software systems to optimize broadband and added value services, has agreed to acquire the operations of Optenet, a Madrid-based provider of information security services, for $ 6.5 million in cash and an additional sum of up to $ 26 million, tied to performances benchmarks over a five-year period. The maximum $ 26 million payment would only kick in if Optenet generated at least $ 140 million in sales over the period. Allot expects the transaction to close by the end of next month, and sees the purchase of Optenet’s operations as a way to substantially broaden its information security business from cellular communications companies. Optenet was founded in 1997. It has a staff of 150 and has a customer base of 140,000, including Deutsche Telekom, O2, Orange and Vodafone. (Yoram Gabison)

TASE retreats from record high, energy stocks slide over antitrust decision

Shares on the Tel Aviv exchange generally declined in trading on Tuesday. The benchmark Tel Aviv-25 index was off by 0.15% to 1,501.15 points, retreating from the all-time high that it reached on Monday, while the Tel Aviv-100 declined by just 0.03% on Tuesday to 1,326.86. Trading volume on the day was 1.38 billion shekels ($ 349 million). The Oil and Gas index declined by 3.7% against the backdrop of news that Antitrust Commissioner David Gilo would defer a decision by two months on breaking up the gas monopoly that controls most of the country’s offshore natural gas reserves. (See additional coverage on this page). Shares in stakeholders in the offshore fields declined on the news, including Avner Oil Exploration, shares of which were off by 5.2%, Ratio Oil Exploration, which declined by 4.4%, and Delek Drilling, which lost 4%. In other developments of note, on Tuesday morning Whitesmoke Software released a shelf prospectus that would have it raise 10 million shekels through the sale of shares. (Dror Reich)

Shekel weakens at opening

The shekel has weakened against the US dollar and the euro at the start of trading this week on the foreign exchange market. The shekel-dollar rate is up 0.8% in comparison with Friday’s representative rate, at NIS 3.9452/$ , and the shekel-euro rate is up 0.28%, at NIS 4.5619/.

Sentiment towards the shekel may have been weakened by heightened security tensions in the region, following the air strike on the Syrian side of the Golan Heights yesterday attributed to the Israel Air Force that killed several Hezbollah operatives, among them Jihad Mughniyeh, a local commander who was the son of Imad Mughniyeh, a Hezbollah military leader who was killed by a car bomb in Damascus in 2008, an assassination also attributed to Israel.

The Shanghai Stock Exchange is down nearly 8%, following the release of figures showing a 4.3% drop in housing prices in China, and the imposition of regulatory restrictions on three large brokers.

FXCM comments in its market review this morning, “In the foreign exchange market, the great drama last week came from the Swiss National Bank, which unpegged the Swiss franc from the euro, abandoning its policy of the past three years. The decision by Switzerland’s central bank not only sent the franc soaring, but also depressed the euro against other major currencies, since it greatly boosted speculation that the European Central Bank will carry out massive monetary expansion that will weaken the euro in the coming year. The euro fell to a twelve-year low against the US dollar, and the shekel-euro rate fell almost to NIS 4.5/, its lowest level since October 2002.

“The dollar index, by contrast, climbed to a new peak last week, and is at its highest since November 2003. The dollar strengthened despite poor US macro figures that somewhat cooled sentiment towards the US economy and expectations of an interest rate rise there. The strength of the dollar chiefly derived from the weakness of other currencies, the euro and commodity currencies.

“The downward move by the shekel-dollar rate was halted last week in the area of the recent lows around NIS 3.87/$ , and the pair is now traded above NIS 3.93/$ . A rise above NIS 3.97/$ could again pave the way to the key level of NIS 4/$ .”

Published by Globes [online], Israel business news – www.globes-online.com – on January 19, 2015

Copyright of Globes Publisher Itonut (1983) Ltd. 2015

Shekel opens stronger

The shekel has strengthened against the US dollar at the opening of trading this week on the foreign exchange market. The shekel-dollar rate is down 0.49% in comparison with Friday’s representative rate, at NIS 3.9387/$ . The shekel is also a little stronger against the euro. The shekel-euro rate is currently down 0.1%, at NIS 4.6682/.

On world markets, the dollar is weaker against most major currencies. The dollar-euro rate is currently around $ 1.18/.

“The Bank of Israel will not be in a hurry to raise interest rates, even after the Federal Reserve raises rates in the US,” Leader Capital Markets says in a market review published yesterday.

FXCM Israel says this morning, “The shekel-dollar rate can be expected to continue moving in the NIS 3.9-4/$ range, with a rise above NIS 3.98/$ likely to encourage speculators to test the ceiling at the psychologically significant NIS 4/$ level once again. A fall below NIS 3.95 could again generate downward momentum towards NIS 3.90/$ .

“The main fear on the markets at present,” FXCM adds, “is of a further fall in the price of oil, which recorded a seventh successive week of declines, and is now deep below $ 50. At the moment, given the excess supply on the oil market, it’s hard to estimate when a floor will be set. If we see oil falling further, this will drag the stock market down as well, and the dollar will rise. Only a hint of renewed quantitative easing by the Federal Reserve will change the strategic track of the US currency.”

Published by Globes [online], Israel business news – www.globes-online.com – on January 12, 2015

Copyright of Globes Publisher Itonut (1983) Ltd. 2015

FXCM: Shekel unlikely to break NIS 4/$ barrier in 2014

The shekel is flat against the dollar and weaker against the euro inter-bank trading this morning. The shekel-dollar exchange rate is up 0.06% against the dollar at NIS 3.947/$ and 0.16% up against the euro at NIS 4.881/.

Yesterday, the Bank of Israel set the shekel-dollar representative exchange rate at NIS 3.944/$ , down 1.18% on yesterday’s rate, and set the shekel-euro representative exchange rate at NIS 4.873/, down 0.407%.

FXCM Israel research department said this morning, “The shekel-dollar exchange rate has stabilized this morning around NIS 3.945/$ after a sharp retreat yesterday. The failure at the start of the week to breach the key NIS 4/$ barrier has paved the way for a wave of profit-taking that saw the exchange rate fall sharply. At the moment the sharp retreat is mainly the result of profit-taking by long traders who probably thought that the one-sided extreme of these market positions was too risky. Worldwide too, we have seen over these past few days a wave of dollar profit-taking. This is a dynamic typical of the end of the year when traders prefer realizing their profitable positions, and there can be no doubt that buying dollars for shekels was the most profitable transaction in the second half of 2014.”

FXCM added, “The likelihood that the market will break through the NIS 4/$ barrier this year is not high. We are nearing the Christmas and New Year holiday and in the next two weeks trading volumes on the global and domestic markets will begin to thin , there will be few fundamental triggers, and in these conditions, it will be difficult to gain the momentum to breach this critical.”

“However, looking ahead, due to growth gaps, interest rate expectations between the US and Israel, and the fact that Israeli is starting an election campaign, the shekel-dollar exchange rate is expected to continue to rise and sooner or later break above NIS 4/$ , and to consolidate above this level during 2015.”

Published by Globes [online], Israel business news – www.globes-online.com – on December 10, 2014

Copyright of Globes Publisher Itonut (1983) Ltd. 2014