A stronger US dollar has the exchange rate on the rise, although the Minister of Finance looks to put taxes on the chopping block. All that, plus the country’s reputation experiences a slight setback. It’s the latest installment of the Israel Business Week Roundup.
From the IsraTransfer Trading Desk
Clearly the US Federal Reserve’s hawkish policy of raising interest rates has achieved its desired result of strengthening the US dollar (albeit much to the chagrin of US President Donald Trump). Consequently, as a result it was another good week for the USD/NIS exchange rate. After starting the week down at 3.62, it reached a high of nearly 3.67 in early trading on Friday. By the end of the day it had only moved back only modestly to close out the week above 3.65. The fact that it did could could signal the beginning of something significant, as the number had been a key level of resistance going all the way back to September.
This week’s announcement by the Central Bureau of Statistics regarding the latest inflation expectations will once again draw the attention of economists, as they continue to speculate on the future of Israel’s interest rates. Inflation traditionally plays a pivotal role in how the Bank of Israel determines its monetary policy, so we’ll be keeping an eye on whether or not it is headed back up, which could result in an interest rate increase this year as opposed to early 2019.
In short-term trading analysis, a look at the charts shows the rate trending higher. Having broken through 3.65, this key level of resistance now become its new level of support. Should the momentum continue to pick up, the possibility of 3.70 isn’t out of the realm of possibility. A move such as that would mean a successful return to the highs of 2018, and provide a handsome reward for those who have been waiting patiently all summer long to exchange their US dollars to shekels.
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Bank of Israel Representative Exchange Rates
For the Week of October 15 thru October 19, 2018
|Currency||Symbol||Week High||Week Low||Week Close|
|South African Rand||ZAR/NIS||0.2584||0.2499||0.2548|
This Week’s Notable Economic Announcements
|Monday, October 22nd||ILS||Inflation Expectations|
|Tuesday, October 23rd||EUR||Euro-Zone Consumer Confidence|
|Wednesday, October 24th||CAD||Bank of Canada Interest Rate Decision|
|Thursday, October 25th||EUR||European Central Bank Interest Rate Decision|
|Thursday, October 25th||EUR||European Central Bank Marginal Lending Facility|
|Thursday, October 25th||EUR||European Central Bank Deposit Facility Rate|
|Thursday, October 25th||USD||Durable Goods Orders|
|Thursday, October 25th||USD||Advance Trade Goods Balance|
|Friday, October 26th||USD||Gross Domestic Product|
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Israel’s deficit may be on the rise, but that isn’t stopping Minister of Finance, Moshe Kahlon, from proposing all new tax cuts. Despite local elections in next week Kahlon vehemently denied any correlation between the two. However, his failure to specify exactly which taxes he is proposing to cut has several attributing the decision to “election economics,” as Kahlon seeks to retain his office.
Israel Slips in the WEF Rankings
It may be one of the most fertile lands when it comes to startups but Israel seemingly has some work to do when it comes to how business gets done in the country as a whole. Following an impressive placement at number 16 in last year’s World Economic Forum’s global competitiveness index, this year the country fell four places to the 20th spot out of the 140 countries ranked.
Some dubious distinctions that contributed to Israel’s lackluster spot in the rankings were in amount of time it takes to open a business (74th), the costs associated with opening a business (50th), and the access to credit available to businesses (45th). Even more troubling are Israel’s alarmingly low placement when it comes to employing foreign workers (125th), the complexity of payments and tariffs (81st), and the transparency of government budgets (90th).
While the setback is certainly a bit of embarrassment for the Prime Minister’s office, which had been taken great pride in last year’s impressive ranking, the news wasn’t all bad. Most notably Israel ranked 6th in the startup sector to go along with other commendable spots on the list in professional training (37th), as well as maritime and air services (42nd).
Wishing everyone a very productive and prosperous week from IsraTransfer.
Searching for the easiest way to send money to Israel? IsraTransfer is Israel’s leading currency exchange firm specializing in wire transfers of US dollars (USD), British sterling (GBP), Canadian dollars (CAD), Euros (EUR), and more to Israel. Founded in 2008, and with over 1 billion NIS exchanged, we are the exclusive operators of the AACI Currency Exchange Program.