Israeli Shekel Weakens Against Dollar After Bank of Israel Holds Rates
Translated & summarized from Calcalist by baba
The Israeli shekel depreciated against the U.S. dollar, trading at approximately 3.10 shekels, following the Bank of Israel's decision to maintain its interest rate. The shekel also weakened against the euro. Global markets are awaiting the U.S. Federal Reserve's upcoming interest rate announcement. In Europe, French bond yields surged to a 24-year high amid political instability, while the Bank of Korea held its interest rate steady, citing persistent inflation and external risks.
The story in 5 lines · by baba
- The Israeli shekel weakened against the dollar, trading around 3.10 shekels.
- The Bank of Israel maintained its interest rate, leading to shekel depreciation.
- French 10-year bond yields exceeded 5% for the first time since 2002.
- Markets await the U.S. Federal Reserve's interest rate decision next Wednesday.
- The Bank of Korea held its interest rate steady at 3%.
The Israeli shekel weakened against the U.S. dollar, trading around 3.10 shekels per dollar, a day after the Bank of Israel decided to keep its benchmark interest rate unchanged. The shekel also lost ground against the euro, which strengthened to over 3.48 shekels. Globally, the dollar index dipped slightly, while the euro and pound saw minor gains against the dollar. Markets are anticipating the U.S. Federal Reserve's interest rate decision next Wednesday, October 28th.
According to Shaun Osborne, Chief FX Strategist at Scotia Bank, no single factor is currently dictating market direction, and this is expected to continue until the Fed's announcement. He emphasized the need to understand the Fed's future policy intentions.
In Europe, rising yields on French government bonds are a significant factor. The 10-year French bond yield surpassed 5% for the first time since 2002, reaching nearly 5.10% amid ongoing civil unrest and concerns about political instability hindering necessary budget reforms.
Meanwhile, the Bank of Korea maintained its policy rate at 3%, as predicted, following two consecutive hikes. Analysts suggest this decision does not signal a policy shift, as inflation remains elevated. The bank cited the need to assess the impact of previous rate increases and monitor local and external risk factors, including the Middle East conflict and the monetary and fiscal policies of major economies. Bank Governor Shin Hyun Song previously stated that the bank would continue its restrictive monetary policy until inflation is confidently on a downward path, noting that inflation in South Korea had accelerated due to rising costs and strengthening demand, remaining above the 2% target for 13 consecutive months.
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