The dollar falls sharply against the shekel: since this morning it has weakened by more than 1.5% and is now trading between the banks around a level of 3.26 - a 4-month low. Its representative price closed today at the level of 3.2910, but after the announcement of the representative, the dollar continued to weaken. Against the euro, the dollar weakened at a more moderate rate of about 1.1%
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"There is a panic in the foreign exchange market.
It seems there are endless sellers.
The Bank of Israel did not intervene in the foreign exchange market this year and did not purchase dollars. If we continue this way with the rapid strengthening of the shekel, there is a chance that it will intervene for the first time", says a veteran trader in the foreign exchange market in a conversation with "Israel Hayom".
According to him, "It is possible that the Bank of Israel became complacent when the dollar rose to the level of 3.55, they thought that the interest rate could be raised by half a percent and that there would be no reaction of the strengthening of the shekel. But as soon as the stock markets went up again, the dollar against the shekel simply collapsed. This is not something that can be ignored anymore."
In the last month, the dollar fell by 20 agorat against the shekel, which is 5.4% of its value, from 3.46 to 3.26.
The main reason for this decrease is the strong correlation with the stock markets in the USA which results from the hedging activity of the institutional bodies.
The trigger that ignited the sharp weakening of the dollar is the publication of good inflation data in the US. The US index rose 8.5% for the 12 months ending in July, lower than the 9.1% increase for the period ending in June. In other words, inflation in the US started to decline.
As a result, the probability that the American governor will increase the interest rate on the dollar by 0.5% and not by 0.75% as most economists believed before the publication of the inflation data, increased.
Against the background of the publication of the inflation data, the stock markets in the US are soaring, led by technology stocks - the S&P 500 index rises by 1.85%, the Nasdaq index jumps by 2.5%.
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