Israeli Shekel Strengthens as Dollar Falls Below 3 Shekels Amid Global Market Calm

The Israeli shekel continues to strengthen against the two leading currencies, with both the US dollar and euro dropping more than 1% against the shekel yesterday. The dollar declined by 0.4% today, trading below 3.00 shekels, while the euro fell over 0.5%, trading above 3.45 shekels. Globally, the dollar index remains stable at 99.8 points against a basket of major currencies. The euro holds steady above $1.15, the British pound above $1.34, and the dollar slightly decreased by 0.2% against the Japanese yen, trading at 157.5 yen.

Investors are closely watching updates on negotiations between the US and Iran regarding a potential agreement to end hostilities and reopen the Strait of Hormuz. Such a deal could ease pressure on oil prices and reduce inflationary impacts. US Treasury Secretary Scott Bessent told CNBC that a deal to reopen the strait might be reached as soon as Tuesday or Wednesday, noting ongoing talks with Iran and the possibility of an imminent agreement.

However, Tony Miano, a global bond analyst at Wells Fargo Investment Institute, cautioned that even if oil shipments resume, it may take time for the oil market fundamentals to stabilize and for consumers to experience significant relief in fuel prices. He added that inflation is unlikely to return to normal levels overnight, with energy-related inflationary pressures possibly easing but broader inflation remaining persistent in the near term. This persistence could limit the potential decline in government bond yields.