Independence Day barbeques weren’t the only thing cooking in the United States early last week as the US dollar looked to continue its hot streak against the shekel.  Meanwhile, Bank of Israel prepares for a changing of the guard, and the State powers up with an impressive honor. Plus, the Economy Ministry plays tag with Israel’s manufacturers, and our trading desk sees sterling getting its kicks at the World Cup.  Ready to cash in on our weekly roundup? Then read on and let’s get to it.

From the IsraTransfer Trading Desk

War, what is it good for? Apparently currency trading, as despite potential global trade wars looming, the US dollar has actually shown remarkable strength of late in what has appeared to be a flight-to-quality.  When coupled with thinner-than-usual trading volume early last week due to the United States July 4th holiday, we witnessed serious strengthening in the American currency versus the shekel, which pushed the USD/NIS exchange rate to 3.6752; its highest level in 14 months.

Unfortunately all good things must come to an end, especially when it comes to currency trading, and the rally eventually ran out of steam, resulting in a correction back to 3.6205 to close the week.  At this point we actually see limited further weakening potential in the shekel versus the greenback, including what appears to be a perceived increased investor appetite for risk, and have begun advising those looking to convert US dollars to shekels to do so now.

In sterling trading things just got even more interesting with the resignation of David Davis as Brexit Secretary of the UK Government.  Considering Davis had represented the loudest voice of opposition to Theresa May’s desire for a soft Brexit, his exit does convey a sense of instability on the global currency market stage.

That said, it might not make too much of a difference in the short-term at all, as the development could actually be overpowered by the “feel-good factor” sterling is experiencing due to England’s unlikely successful run in the World Cup soccer tournament.  Should the winning streak continue with Wednesday’s match we think the currency could actually continue to strengthen regardless of what Brexit news continues to emerge.  So for any English expats looking for another yet another reason to take a break from work to watch more football…now you have one. Go England!

Stay on top of daily trading in the shekel, plus notable news, economic announcements and more with IsraTransfer’s free Daily Shekel Report newsletter.

Bank of Israel Representative Exchange Rates

Currency Symbol Week High Week Low Week Close
US Dollar USD/NIS 3.6752 3.6198 3.6205
British Pound GBP/NIS 4.8413 4.8013 4.8198
Euro EUR/NIS 4.2723 4.2448 4.2555
Australian Dollar AUD/NIS 2.7091 2.6837 2.7003
Canadian Dollar CAD/NIS 2.7844 2.7608 2.7635
South African Rand ZAR/NIS 0.2699 0.2639 0.2690
Swiss Franc CHF/NIS 3.6934 3.6566 3.6654


This Week’s Notable Economic Announcements

The following are some announcements to be aware of that could affect prices and activity in currency trading.

Date Currency Announcement
Monday, July 9th   CHF Unemployment Rate
Monday, July 9th   USD Consumer Credit Report
Tuesday, July 10th   EUR Euro-Zone ZEW Survey (Economic Sentiment)
Wednesday, July 11th   CAD Bank of Canada Rate Decision
Thursday, July 12th   GBP Bank of England Credit Conditions & Bank Liabilities Survey
Thursday, July 12th   USD Consumer Price Index
Monday, July 9th   CHF Unemployment Rate
Monday, July 9th   USD Consumer Credit Report

*Source: DAILYFX

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Israel Makes the Grade Yet Again

Kudos to the State of Israel for being named to US News and World Report’s Best Countries for the second year in a row.  In a repeat performance of 2017, Israel once again took the eighth position in the “power ranking” category, ahead of larger countries that include Canada, Singapore, and the United Arab Emirates.

Among the reasons cited for Israel’s placement on the list include its technologically advanced market economy whose major exports include high-technology equipment and pharmaceuticals.  The State’s impressive high life expectancy, education, and other human development index indicators also served as major contributors to Israel’s ranking.

Additionally, Israel placed tenth overall in the survey’s “up and coming economy” category, thanks in part to its robust role in cultural influence, global affairs, and entrepreneurship.  The survey, based on evaluations of 80 countries by 21,000 experts polled also credits Israel’s strong relationship with the United States (which took top honors) as a major factor in its placement on this year’s list.

Israel Interest Rate Update

Don’t expect much excitement at this week’s Bank of Israel interest rate announcement, as Governor, Karnit Flug, gets set to bolt her position as the institutions top official later this year.  In one of her final short-term interest rate decision Monday, the overwhelming consensus is for no change yet again; something that hasn’t happened since 2015.

Bank of Israel

In fact, one area of concern that has emerged is the chance that Bank of Israel’s much anticipated interest rate hike expected later this year may now in fact get pushed off to early 2019. Although inflation has been slightly inching its way higher of late, it still remains well below the 1-3% range Bank of Israel has been aiming for ahead of hiking rates, thus bolstering the case for holding off until next year.

Additionally, given that the shekel has weakened recently, with the USD/NIS now hovering around 3.63, concerns have surfaced that increasing rates too soon could potentially result in a ripple effect that would strengthen the shekel, and thus reverse the gains made in the exchange rate.  Even though Bank of Israel is not expected to take any action this time around, yields in government bonds have been on the upswing in the past few days, leading many economists to believe BoI will provide a more clear forecast of its future plans regardless of what it does (or doesn’t do) when it meets today.  Stay tuned…

Born in the Holy Land

Hoping to cash in on a sense of national pride, Israel’s Economy Ministry plans to launch a major advertising campaign designed to bolster the purchase and use of products manufactured at home in Israel.  Prominently displayed “Made in Israel” labels on nearly 6,000 items will be used as the main driver behind the initiative intended to combat currently disproportionately low percentage of sales of Israeli-made goods – something that can’t come soon enough for Israel’s manufacturers.

Currently less than 40% of all food products purchased in Israel’s supermarkets have domestic roots, which remarkably seems impressive when compared to the miniscule 8.5% of all personal care products bought by Israelis annually that are manufactured at home.

Makers of products aren’t the only ones expected to benefit from the new campaign, as beyond the obvious marketing motivations, the initiative also seeks to assist the Ministry in its efforts to enforce regulations of Israeli-made products, namely among suppliers.

Ok, consider yourself back in-the-know.  Wishing everyone a very productive and prosperous week from IsraTransfer.

Looking for the easiest way to transfer money to Israel? IsraTransfer Ltd. 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.

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