Dollar Hits Six-Month High Against Shekel Amid US Inflation Data
Translated & summarized from Maariv by baba
The US dollar has climbed to its highest point against the Israeli shekel in over six months, nearing levels last seen in March. This surge was triggered by US inflation data showing a 3.7% annual rate for September, surpassing expectations. While the dollar's global strength moderated, its rise against the shekel continued, attributed to US data and local factors. Investors are now awaiting Israeli inflation figures due later today.
The story in 5 lines · by baba
- The US dollar reached its highest level against the Israeli shekel in over six months.
- US September inflation data at 3.7% exceeded the 3.6% forecast, driving the dollar's rise.
- The dollar has strengthened by 3.22% against the shekel in the past six months.
- Local factors and regional risk also contributed to the dollar's appreciation against the shekel.
- Investors await Israeli inflation data due later today for further market direction.
The US dollar has surged against the Israeli shekel, reaching its highest level in over six months, approaching levels not seen since March. This sharp rise followed a significant jump in trading on Tuesday, primarily driven by higher-than-expected US inflation data released for September. The US inflation rate came in at 3.7% annually, exceeding the 3.6% forecast.
The dollar's strength against the shekel has been notable over various periods: it strengthened by 1.25% in the past week, 2% in the last month, 3.68% over the last three months, and 3.22% in the last six months. However, despite this recent appreciation, the dollar remains weaker by 5.35% compared to its level a year ago in October, when it stood at 3.3 shekels per dollar.
Yossi Menashe, founder and co-CEO of Altshuler Shaham Financial Services, explained that the reaction to the US inflation data highlighted the tension between price pressures and concerns about economic growth. Initially, the data boosted expectations for an interest rate hike, pushing the yield on ten-year US Treasury bonds to 5.32% during trading before settling around 5.11% by Wednesday morning.
Globally, the dollar's advance moderated later in trading due to stock market declines and fears of a slowdown in economic activity. Nevertheless, the dollar's gains against the shekel largely persisted, influenced by both the US data and "local factors and regional risk," according to Menashe. Attention is now turning to inflation data expected from Israel later today, which could alter the currency market's outlook.
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