Dollar Strengthens Globally While Stable Against Shekel Amid Gaza Peace Talks
On Friday morning, the Israeli foreign exchange market showed slight movements amid political developments around the Gaza Strip and a strengthening dollar in international markets. Locally, the US dollar remained stable at approximately 3.059 shekels, the euro weakened by 0.2% to 3.520 shekels, and the British pound experienced a minor decline to 4.113 shekels. Globally, the euro dropped 0.2% against the dollar to $1.151, the pound fell 0.2% to $1.344, and the dollar strengthened 0.7% against the Japanese yen to 160.61 yen following the Bank of Japan's interest rate decision. The dollar index rose 0.4% to 100.08 points.
Investors are closely monitoring US President Donald Trump's announcement that the Gaza Peace Council reached an agreement for the complete disarmament of Hamas and other armed groups in Gaza. Trump described the deal as a "monumental step forward toward sustainable peace and security." The plan involves phased implementation, with Israeli forces withdrawing from Gaza as disarmament progresses. Subsequently, an international stabilization force and a new Palestinian police force would assume security responsibilities, alongside a new Palestinian government cooperating with the Peace Council. However, Hamas has explicitly opposed the sequence of actions, with senior official Razi Hamad stating no disarmament will occur before Israeli withdrawal, creating uncertainty about the timeline and order of implementation. US officials expect the process to begin in the coming weeks in coordination with Israel, but the Peace Council cautions it will take time.
Separately, the Bank of Japan maintained its interest rate at 1%, warning that core inflation may exceed its 2% target. The decision passed with an 8-1 vote, with council member Ajima Takata dissenting in favor of raising the rate to 1.25%. The central bank forecasted that core inflation will likely rise above the target starting in the second half of fiscal year 2026.