US Dollar Rises Above 2.97 Shekels Amid Global Market Shifts

The Israeli shekel, which sharply strengthened against the US dollar yesterday (with the dollar dropping from 3.00 to 2.97 shekels), reversed course this morning as the dollar gained 0.3%, trading above 2.97 shekels. The euro slightly declined to around 3.47 shekels. Globally, the dollar index showed a minor increase to 98.9 points against a basket of leading currencies, while the euro and pound both fell by 0.1%, trading above $1.16 and $1.36 respectively.

This currency movement occurs amid significant declines in oil prices, which are expected to lower inflation by reducing costs of petroleum products. The most notable market reaction was seen in US Treasury yields, which dropped sharply: the 10-year yield fell by 8 basis points to 4.63%, the 30-year yield decreased by 6 basis points to 5.16%, and the 2-year yield declined by 5 basis points to 4.18%.

Investors are awaiting the release of the US Personal Consumption Expenditures (PCE) price index for July, a key inflation gauge influencing Federal Reserve policy. Attention is also focused on the upcoming speech by Fed Chair Jerome Powell at the annual central bankers’ conference in Jackson Hole, scheduled for Friday. Kurt Lewis, head of central bank policy at Piper Sandler, noted that given Powell’s recent press conference tone, a deep discussion on the current economic forecast and its monetary policy implications for 2026 is unlikely. Instead, Powell is expected to address broader economic issues and how the Fed’s task forces will handle key challenges.