Israeli Shekel Strengthens Ahead of Inflation Data Amid Global Market and Geopolitical Tensions

The Israeli shekel showed further strengthening against major currencies on Friday morning as investors digested recent U.S. inflation data. The local market is awaiting the release of Israel's inflation figures for July, expected at 14:00, which could influence the Bank of Israel's future interest rate policy. The shekel gained as the dollar weakened by 0.4% to 2.960 shekels, the euro declined 0.1% to 3.416 shekels, and the British pound dropped 0.2% to 3.996 shekels. Globally, the euro and pound slightly strengthened against the dollar, while the dollar index fell by 0.1% to 99.73 points.

Market analysts forecast that Israel's Consumer Price Index will show a 0.4% monthly increase following June's stagnation, with an annual rise of 1.6%, similar to the previous month. Alongside economic data, markets are closely monitoring geopolitical developments, particularly U.S. threats against Iran. U.S. Treasury Secretary Janet Yellen warned of unprecedented economic isolation measures against Iran, including a blockade of the Strait of Hormuz to prevent goods from entering or leaving Iranian ports. She indicated further announcements would come next week. Vice President J.D. Vance emphasized that the U.S. priority in conflict with Iran is to reduce oil and fuel prices domestically, placing nuclear non-proliferation as a secondary concern.