Israeli Shekel Weakens Sharply Against Dollar, Reaching Two-Month High

The Israeli currency, the shekel, experienced a significant decline, reaching a two-month high against the U.S. dollar, which climbed to 3.08 shekels. This marks a notable increase from the previous closing rate of 3.033 shekels on Friday. Meanwhile, the euro also rose, trading above 3.49 shekels. These movements occur against a backdrop of global currency fluctuations, with the dollar index showing a slight increase and the euro seeing a minor dip. The strengthening of the dollar is partly attributed to heightened geopolitical tensions, particularly concerning Iran and the Strait of Hormuz. Reports suggest President Trump rejected an updated settlement offer from Iran aimed at ending the confrontation and reopening the vital waterway. There are also expectations that U.S. strikes in Iran could resume after the November midterm elections, contributing to rising oil prices. Analysts suggest that sustained energy market tensions and increasing inflation risks could further bolster the dollar beyond levels justified by economic data in the short term. The Oversea-Chinese Banking Corporation (OCBC), a major Singaporean bank, anticipates a moderate dollar strengthening through the end of the year. Investor attention will soon shift to upcoming U.S. economic data, including the second-quarter Personal Consumption Expenditures (PCE) index and September employment figures, both of which are expected to support continued monetary policy tightening by the Federal Reserve. Markets currently price in a 65% chance of an interest rate hike at the Fed's next meeting on October 28.