Turmoil on global markets following S&P's decision to downgrade the US credit rating, and sharp falls on the TASE, all weighed heavily on the shekel in inter-bank trading Monday morning. The shekel was down 0.62% against the US currency to NIS 3.542/$, and plunged 2.22% against the euro to NIS 5.089/€.
As G-7 leaders pledge to restore stability to global markets Bank of Bank of Jerusalem (TASE: JBNK) believes that the dollar's potential to continue strengthening against the shekel is limited, and is influenced by the political and economic uncertainty and fear about growth on global markets.
The Bank of Jerusalem believes that while the dollar may continue to strengthen in the coming days, it is only a temporary strengthening that will end when calm and optimism return to the markets. Bank of Jerusalem wrote in its daily survey, "The dollar will reach a stronger resistance threshold at NIS 3.55/$ and crossing it will be a serious obstacle, but we do not rule out this happening."