developing· Economy· Updated 10:38

Israeli Shekel Reverses Gains, Dollar Surges After Election Results

The Israeli shekel fell sharply against major currencies on Wednesday, reversing its election-day gains due to political uncertainty following preliminary election results. The U.S. dollar rose by up to 1.3% to trade near 3.09 shekels, while the euro climbed about 1.2% to surpass 3.42 shekels.

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Israeli Shekel Reverses Gains, Dollar Surges After Election Results — Illustration by baba

What happened

01The Israeli shekel fell up to 1.3% against the dollar and 1.2% against the euro on Wednesday.
02The U.S. dollar rose to trade near 3.09 shekels, while the euro surpassed 3.42 shekels.
03Political uncertainty intensified as preliminary results projected Benjamin Netanyahu's bloc to win 55 Knesset seats.
04The market shift reversed earlier shekel gains driven by expectations of a victory for Gadi Eisenkot and the "Change bloc."
05Accountant Eran Buchris advised small and medium-sized businesses to consider fixing exchange rates due to currency volatility.
06Mortgage CEO Meir Weider stated that the dollar's rise does not directly impact shekel mortgage interest rates.
07Global financial markets focused on the U.S. Federal Reserve's interest rate decision, with expectations of rates holding at 4%.

The currency volatility followed overnight election results that differed from initial exit polls. While early expectations of a victory for Gadi Eisenkot and the "Change bloc" had strengthened the shekel, subsequent counts showing Benjamin Netanyahu's bloc projected to win 55 seats created a political stalemate, with no clear path to a stable 61-member Knesset coalition.

Financial experts warned of the impact on businesses, noting that importers face higher costs while exporters stand to benefit. Meanwhile, global markets remained focused on the U.S. Federal Reserve's upcoming interest rate decision, with investors widely expecting rates to remain unchanged at 4%.

Summarized by baba from the reports of 3 newsrooms. Updated 10:47

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