Dollar Surpasses 3 Shekels Amid Market Volatility and Uncertainty

The US dollar has once again crossed the threshold of 3 Israeli shekels after weeks of sharp fluctuations in the foreign exchange market. Consumers and investors are now debating whether to buy dollars immediately or wait. Matanya Cordova, CEO of Reches Finance, explained to Maariv that the dollar exchange rate in 2026 is influenced by multiple factors, including security events, interest rate decisions, global capital markets, and institutional activity in Israel.

Cordova highlighted Wall Street as a key factor: when US stock markets rise, Israeli institutional investors often adjust their portfolios, leading to dollar sales and a stronger shekel. Conversely, declines in US markets can increase demand for the dollar, weakening the shekel. Interest rate differentials between Israel and the US also play a role; lowering rates in Israel while US rates remain high can reduce the attractiveness of shekel investments and support dollar strength.

Additional influences include energy prices, developments in the Middle East, and overall market risk levels. During periods of heightened uncertainty, investors tend to flock to the dollar as a safe haven. Cordova noted the difficulty in predicting the dollar’s next move: if security tensions ease, Wall Street strengthens, and Israeli interest rates remain stable, the shekel could regain strength. However, ongoing uncertainty, stock market declines, or further rate cuts in Israel may continue to pressure the shekel.

The Bank of Israel may intervene in the foreign exchange market during extreme volatility, but its goal is to maintain orderly market function rather than set a target exchange rate. For the public, the main advice is to avoid making decisions based on daily headlines. Those planning foreign travel, dollar purchases, or overseas investments are advised to spread their purchases over time rather than attempt to time the market. Investors should incorporate dollar exposure as part of a broader investment strategy rather than reacting to short-term exchange rate movements.