Dollar Hits Six-Month High Against Shekel Amid Market Volatility
Translated & summarized from Israel Hayom by baba
The U.S. dollar reached a six-month high against the Israeli shekel, surpassing 3.1 shekels, driven by institutional investor purchases and foreign capital outflow. This surge is linked to declines in U.S. stock markets and investor concerns over potential security escalations before the upcoming elections. Analysts suggest this may be a temporary correction amid global economic uncertainties and inflationary pressures.
The story in 5 lines · by baba
- The U.S. dollar reached a six-month high against the Israeli shekel, trading above 3.1 shekels.
- Aggressive purchases by institutional investors and foreign capital outflow are key reasons for the dollar's rise.
- Concerns over potential security escalations ahead of the elections are causing foreign investors to leave Israel.
- Banking sources suggest the dollar's strengthening may be a temporary correction, not a trend reversal.
- Continued market volatility is expected through year-end due to global inflation and Israeli elections, according to Yossi Levi.
The U.S. dollar surged past the 3.1 shekel mark, reaching its highest level in six months against the Israeli currency. This strengthening is attributed to aggressive purchases by institutional investors seeking to bolster their dollar-backed securities, coupled with a notable outflow of foreign investment from Israel. Banking sources indicate that recent declines in the Nasdaq, and sharp drops in futures this morning, have compelled institutional investors to increase their dollar holdings, driving the demand for the currency. Adding to the market's unease is the departure of foreign investors ahead of the upcoming elections, fueled by concerns over potential security escalations. The euro also strengthened against the shekel, reaching 3.47 shekels, while the British pound rose by 0.6% to 4.1 shekels. U.S. stock futures showed mixed performance, with the Nasdaq down over 1%, the S&P 500 futures down 0.4%, and the Dow futures up approximately 0.1%.
Despite the dollar's rise, banking system sources suggest this may be a temporary correction rather than a trend reversal, noting that New York's earnings season has begun with results largely meeting expectations. The current market behavior is primarily driven by uncertainty. Yossi Levi, CEO of Mor Investment House, anticipates continued volatility through the end of the year, though not necessarily a change in market trends. He pointed to companies streamlining operations, adapting to AI, and the absence of liquidity crises. However, persistent global inflationary pressures, driven by oil prices and security concerns, alongside Israel's upcoming elections as a critical factor, are expected to contribute to this volatility.
