Following Prime Minister Benjamin Netanyahu's announcement on Sunday that the legal reform will be advanced this week by "practical and measured measures," the foreign exchange trading week began with a sharp weakening of the shekel against the dollar and euro. The dollar jumps about 1.5% to NIS 3.6080 at this time. The euro strengthened by about 1 percent against the shekel to 3.9280.
Netanyahu responds to Knesset drama: Gantz and Lapid sought any way to blow up talks | Likud Spokesperson's Office
Netanyahu said at the cabinet meeting that "what was proven last week was that Gantz and Lapid played a game. For three months, their representatives did not agree to the minimum agreement. Their goal was to dissolve every correction. Therefore, we will convene this week and begin practical steps in a measured and responsible manner." After yesterday's announcement, the Tel Aviv Stock Exchange was painted red and locked down.
According to a capital market source, "If the legislation is advanced unilaterally, it will cause the dollar-shekel to rise again and the equity indices to decline, widening the short yield between the domestic and global stock markets. We will return to the trends that prevailed here until the beginning of June."
Since the beginning of the month, the shekel has strengthened again against the dollar, based solely on the belief in the markets that the sides will reach broad agreements at the president's residence. After the dollar had already surged to 3.75 two weeks ago, the trend reversed and the dollar fell back below $3.60. Last Friday, the strengthening trend of the shekel continued—the dollar's representative exchange rate was set at -3.5530, a decline of about 0.9 percent.
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