Shekel strengthens in wake of interest rate hike

By GLOBES
May 24, 2011 11:36

The shekel strengthened against the dollar and euro in morning inter-bank trading, the morning after the Bank of Israel raised the interest rate by 25 basis points to 3.25%. The shekel-dollar exchange rate fell 0.95% to NIS 3.482/$ and the shekel-euro exchange rate fell 0.69% to NIS 4.899/€.

In international markets, the dollar is trading at $1.405/€.

Clal Forex has set the shekel-dollar exchange rate support level at NIS 3.464/$ and the resistance level at NIS 3.55/$. "A breakthrough and closing above NIS 3.55/$ could result in the exchange rate rising to $3.60/$," it said today.

Goldman Sachs says that the Bank of Israel may not raise the interest rate next month, but predicts that the interest rate will reach 4.25% by the end of 2011 and 5.25% by the end of 2012. JPMorgan believes that the interest rate will reach 4.5% by the end of 2011 and 5.5% by the end of 2012. Merrill Lynch predicts a 4% interest at the end of 2011, while Barclays expects it to reach 4.5% by early 2012.


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