Israeli Shekel Weakens Against Dollar and Euro After Rate Decision
Translated & summarized from Calcalist by baba
The Israeli shekel weakened against the US dollar, trading above 3.09, and against the euro, reaching 3.48, following the Bank of Israel's decision to hold interest rates steady. Globally, markets await the US Federal Reserve's rate announcement. Meanwhile, French bond yields hit a 24-year high amid political instability, and the Bank of Korea maintained its interest rate due to high inflation.
The story in 5 lines · by baba
- The Israeli shekel weakened against the dollar, trading above 3.09 shekels, and the euro at 3.48.
- The Bank of Israel decided to keep its interest rate unchanged.
- Global markets await the US Federal Reserve's interest rate announcement on October 28th.
- French 10-year bond yields exceeded 5% for the first time since 2002.
- The Bank of Korea maintained its interest rate at 3% due to persistent inflation.
The Israeli currency, the shekel, has weakened against the US dollar, trading above 3.09 shekels, a slight increase of 0.4%. This comes after a minor retreat in the dollar yesterday and follows the Bank of Israel's decision to maintain its interest rate unchanged. The shekel also lost ground against the euro, which strengthened by 0.4% to trade at 3.48 shekels.
Globally, the dollar index, which measures the dollar against major world currencies, fell 0.2% to 101.6 points. The euro rose 0.1% to over $1.12, while the British pound remained unchanged around $1.34. Market participants are awaiting the US Federal Reserve's interest rate announcement next Wednesday, October 28th.
Shaun Osborne, Chief Forex Strategist at Scotia Bank, noted that no single factor is currently dictating market direction and expects this to continue until the Fed's decision. He emphasized the need to understand the Fed's future policy direction.
In Europe, the euro's performance is influenced by rising yields on French government bonds. The 10-year French bond yield increased by 6 basis points to 4.99%, briefly crossing 5% during the day, the first time since 2002. This rise is attributed to ongoing unrest in France and concerns that political instability could hinder necessary budget reforms.
In Asia, the Bank of Korea kept its interest rate at 3%, aligning with expectations and following two consecutive hikes. Analysts believe this decision does not signal a policy shift, as inflation remains high. The bank cited the need to assess the impact of previous hikes and monitor local and external risk factors, including increased uncertainty surrounding the Middle East conflict and the monetary and fiscal policies of major economies. Last week, Bank of Korea Governor Shin Hyun Song indicated that the bank would maintain a restrictive monetary policy until inflation is confidently returning to its target, noting that inflation had accelerated due to rising costs and strengthening demand. South Korea's inflation stood at 2.9% in September, remaining at or above the central bank's 2% target for 13 consecutive months.
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