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Already down $800 million in sales this year, industrial companies and exporters are projected to lose an additional $2 billion in 2007 from continued weakness of the US dollar.
"The losses in export deals are a result of the damage caused by the depreciation of the US dollar, which hit the ability of Israeli industrial companies to compete abroad," said Shraga Brosh, president of the Manufacturers Association of Israel.
A survey of 101 industrial companies conducted by the Association, of which 80 percent were export-oriented, also found that the 9% fall of the US currency from the beginning of the year, has cut net profits for 2006 by an average of 4.9%.
For 2007, the damage to the industry will be felt mostly by exporters who are estimated to lose $1.6b. from sales. Some $400m. was expected to be lost from sales in the local market.
Brosh added that in 2007 manufacturers expect an average damage of 5.2% to net profits following the appreciation of the shekel against the dollar over the past year.
Meanwhile, Ziv Pnini, head of the trading room at Migdal Capital Markets, recommended that exporters, although hit hardest by the continued fall in the US dollar should in the short-term react with indifference to the volatility of the dollar exchange rate.
"Every financial officer has the ability to hedge against currency risks and thus neutralize the company's exposure," Pnini explained. "Historically, in most times, the shekel strengthens slowly step by step against the dollar and falls dramatically in a crisis period - the fear is in the dramatic fall rather than in the strong appreciation."
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