Shekel Weakens as Dollar Rises and Israel Posts First Current Account Deficit Since 2012

The shekel weakened as the dollar gained 0.4% and traded above 3.98 shekels, while the euro rose by a similar rate and hovered near 3.41 shekels. The move came after a sharp selloff in New York technology stocks and amid progress toward a U.S.-Iran agreement, alongside a New York Times report on limits on IDF operations in Lebanon.

In global markets, the dollar index was steady at 101.0 points, the euro was stable just above $1.14, and the pound held above $1.32 a day after the resignation of Britain’s prime minister, identified in the article as Starmer. Investors are mainly waiting for geopolitical developments, especially the U.S.-Iran talks and the implications of the future successor’s selection.

In Israel, the current account of the balance of payments swung into deficit for the first time since 2012, but for a very different reason than before. Economist Adrian Filot wrote in Calcalist that in the first quarter of 2026 the current account showed a deficit of $0.1 billion, while foreign direct investment in Israel jumped to a record quarterly high of $14.1 billion.

Both figures stem from the same source, record profits at Israeli high-tech and AI companies. Those profits widened the primary income deficit to $6.7 billion, but they were also booked again as inward direct investment. The result, Filot said, is a paradox, the more successful the tech sector is, the larger the deficit appears. According to the Central Bureau of Statistics, the goods and services account still posted a $5.4 billion surplus, with services exports again nearing $10 billion, so the deficit reflects capital income rather than trade weakness.