Dollar nears the 3-shekel mark as Tel Aviv stocks fall

Trading on the Tel Aviv Stock Exchange opened lower, with the main indexes losing between 1.2% and 1.7%. At the same time, the U.S. dollar strengthened against the shekel and again approached the 3-shekel level.

Ronen Menachem, chief economist at Mizrahi Tefahot Bank, said the dollar had gained against major currencies over the past week, but had risen even more sharply versus the shekel. He attributed the move to a combination of a stronger dollar globally, driven by expectations of a U.S. interest rate hike, and a weaker shekel because of concern over the implications for Israel of the U.S.-Iran agreement.

Menachem also said falling stock markets in the United States are adding pressure on the Israeli currency. He noted that the shekel is weakening after a period of relative strength and said the approach to 3 shekels per dollar may lead traders to reassess the market direction. Even so, he said uncertainty is likely to remain high.