The extensive military operation in the Jenin refugee camp area and the promotion of legal legislation without broad consensus are making their mark on the foreign exchange market.
Governor Prof. Amir Yaron announces an increase in the interest rate (Archive) \\ Photo: Yoni Rinker
The shekel weakened on Monday morning against the leading currencies at the opening of trading this morning: against the dollar, it is currently trading at NIS 3.72, an increase of 0.5 percent. The euro was trading at NIS 4.055, up 0.9%. Today and tomorrow there is expected to be sparse trading as the US market is closed for Independence Day.
Ronen Menachem, Chief Market Economist, Mizrahi Tefahot Bank, said this morning, "The foreign exchange market is experiencing a turbulent period even before the start of the military operation. However, past experience shows that as long as these are focused actions, which experts estimate should last a few days (perhaps even a day or two), that do not expand, lengthen, or become more complicated, God forbid, their impact on economic activity is very limited. This influence is the main point that distinguished between time-limited operations and broader operations and warfare (and conflicts that spilled over into Israel's borders) in the past.
Ronen Menachem, Chief Market Economist at Mizrahi Tefahot, photo: Mizrahi Tefahot Bank PR
"Therefore, beyond the initial implications for market sentiment, it is possible that the reactions will be relatively measured. In any case, a variety of scenarios must be taken into account, and the dynamics of action are what will affect the direction and level of intraday volatility of the markets for as long as it continues."
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