US-Iran Tensions Trigger Sharp Market Reactions as Dollar Hits 3.05 Shekels

Financial markets sharply reacted to escalating tensions between the United States and Iran, with significant impacts observed on July 8, 2026. Following heated exchanges and tweets from former President Donald Trump, crude oil prices surged by 5 percent, reaching $77 per barrel. This spike in oil prices contributed to a global stock market downturn, including a notable decline in the Tel Aviv Stock Exchange.

The leading indices in Tel Aviv fell by approximately 1 percent, with the TA-35 index dropping 0.9 percent, TA-90 down 1.8 percent, and TA-125 decreasing by 1.2 percent. Concurrently, the Israeli shekel weakened against the US dollar, trading above the 3.05 shekel mark per dollar.

Yossi Mansha, founder and co-CEO of Altshuler Shaham Financial Services, explained that the escalation in the Persian Gulf and the Strait of Hormuz region increased global risk premiums, pushing oil prices higher and boosting demand for the dollar as a safe haven currency. He noted that as long as energy prices remain elevated and geopolitical uncertainty persists, the shekel will be influenced not only by the Bank of Israel's domestic policies but also by global dollar trends, US bond yields, and developments in the Middle East.

Mansha also highlighted that the market is still absorbing the Bank of Israel's recent interest rate cut. However, a more significant factor for the foreign exchange market is the bank's renewed intervention in currency trading, including dollar purchases during June. These interventions aim to stabilize the shekel amid ongoing volatility.