Bank of Israel Imposes Holiday Trading Restrictions

The Bank of Israel will implement restrictions on foreign currency trading starting Friday, ahead of the Rosh Hashanah holiday. These measures, which are standard practice during Jewish holidays, include a prohibition on opening and closing dollar deposits and executing transfers. As a new official exchange rate will not be set on Friday, the rates finalized on Thursday will remain in effect until trading resumes on Monday.

Domestically, the currency market is experiencing relative calm, with the dollar trading around 3.02 shekels and the euro slightly below 3.52 shekels. This contrasts with a heightened sense of alertness in global markets, which are anticipating significant macroeconomic announcements.

The European Central Bank (ECB) is expected to announce an interest rate hike on its deposit facility from 2.25% to 2.50% on Thursday. This follows a similar substantial increase in June and a period of no change in July. The move is a response to soaring inflation in Europe, which reached 3.3% in August, a new high since September 2023, largely driven by a sharp 14.3% increase in energy prices during the month.

Global currency markets are also awaiting U.S. inflation data due Friday. In the meantime, the dollar index has seen a slight decrease of 0.1% against a basket of currencies, settling at 98.7 points. The euro is holding steady above $1.15, and the British pound has strengthened slightly, crossing the $1.35 mark.