It was certainly a non-stop week in Israeli business, and we’re not just talking about the new direct routes from Washington DC to Tel Aviv. Elsewhere, S&P gave Israel a little more credit where credit is due, however, breaking up proves even harder to do, especially when it comes to sterling at the IsraTransfer trading desk. All that, plus we get back to work with some of the perks of being your own boss. Ready to get down to business? Then good news, because the latest IsraTransfer Israel Business Week Roundup has got you covered.
From the IsraTransfer Trading Desk
“Strength in numbers” was definitely the theme of the week for the US dollar last week, as steady inflation, low unemployment, and robust consumer spending combined to boost the American currency versus the shekel. Aside from the Consumer Price Index on Friday, no major announcements are slated this week for the US economy, so news will be the big driver of how the USD trades. At the moment uncertainty surrounding potential global trade wars and the resuming of US sanctions against Iran are taking center stage as the current headline makers. However, as is usually the case, US President, Donald Trump’s trademark erratic style always has the potential to shake things up at a moment’s notice.
On the domestic front, Israel’s foreign currency reserve numbers due out Wednesday do have the potential to affect strength in the shekel. Should Bank of Israel’s reserves increase from the $114 billion USD reported last month, we would expect to see some possible weakening in the NIS that could help get the exchange rate back up over 3.70 level – a key level of resistance dating all the way back to March of 2017. While far too early to know for sure, if it does break though there and hold, from a technical trading perspective no major resistance could get in its way all the way up to 3.75. Wouldn’t that be something?!
Although we continue to feel that further weakening potential in the shekel is limited, recent trading has been going against our most recent analysis. That said, we are shifting our short-term approach to more of a “wait and see” approach with what looks like reasonable support for the USD/NIS around the 3.65 level.
Not surprisingly it was yet another week of nothing making any sense in UK economics. Case in point, last Thursday, with its consumer confidence slumping, the credit market beginning to take note of Brexit risks, and food lines actually popping up in London, in surprising unanimous decision Bank of England went ahead and actually raised interest rates to their highest level since 2009! Furthering adding to the fog of Brexit, BOE Governor Carney has gone on record suggesting that interest rates could come back down even if the messy process continues….
With a virtually non-existent economic calendar, at least until Friday when UK Gross Domestic Product will be released, everything should continue to focus on Brexit talks between the EU and the UK, which now includes a 60% chance of no deal being reached. At this rate there is seemingly no end in sight for the unpredictability of what could and will happen next. Keeping that in mind, our opinion has and continues to remain the same as it has in weeks past – take advantage of “up days” in the exchange rate to convert your funds.
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Bank of Israel Representative Exchange Rates
For the Week of July 30th thru August 3rd, 2018
| Currency | Symbol | Week High | Week Low | Week Close |
| US Dollar | USD/NIS | 3.7052 | 3.6514 | 3.6897 |
| British Pound | GBP/NIS | 4.8378 | 4.7830 | 4.8062 |
| Euro | EUR/NIS | 4.3108 | 4.2549 | 4.2681 |
| Australian Dollar | AUD/NIS | 2.7399 | 2.7001 | 2.7308 |
| Canadian Dollar | CAD/NIS | 2.8516 | 2.7953 | 2.8402 |
| South African Rand | ZAR/NIS | 0.2805 | 0.2734 | 0.2774 |
| Swiss Franc | CHF/NIS | 3.7272 | 3.6709 | 3.7122 |
Source: xe.com
This Week’s Notable Economic Announcements
| Date | Currency | Announcement |
| Tuesday, August 7th | AUD | RBA Cash Rate Target |
| Thursday, August 9th | CHF | Unemployment Rate |
| Friday, August 10th | GBP | Gross Domestic Product |
| Friday, August 10th | GBP | Employment/Unemployment Rates |
| Friday, August 10th | USD | Consumer Price Index |
*Source: DAILYFX
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Extra Credit for the Israel Economy
It certainly has been quite a summer for the Israel economy. After picking up an endorsement from Moody’s Investor Services last week with an outlook upgrade, S&P has now followed suit with an upgrade of its own. The bump up in credit rating to AA- from A+, primarily resulting from an improvement in the Israeli government’s fiscal policy signals the sixth time the State’s credit rating has improved since S&P began following it in 1988. Being moved to “double A” also marks Israel’s entrance into an exclusive club of just 15 other countries, including the US, to boast the rating. Although the change in rating isn’t expected to have too much of a dramatic effect on the economy at the macro level, a subtle positive ripple effect is already being reflected in rises in both Israel’s equity and bond markets since the announcement.
Israel Entrepreneurship
Few things rival the rewarding experience that comes with making Aliyah. Unfortunately, finding and building a new career once you’re here has the potential to take some of the wind out of a new oleh’s sails. One way in which to combat the challenge of finding a job is to create one of your own. With the highest percentage of engineers and scientists based on its total population, Israel has even become one of the top ten places for venture capital investment.
As the Israeli government is very open when it comes to business investments, many olim are turning to entrepreneurship as their new career of choice. Beyond the luxury of setting your own working hours, there are several other benefits that go along with the decision to become your own employer. Among the most notable perks include the grants and loans that are offered regularly to both domestic and foreign startups. Additionally, owners of new businesses in Israel are also entitled to special tax considerations that should definitely not be overlooked either. Some of these include tax breaks of up to 15 years for those who qualify based on the location of the business and its ownership. As is always the case we do strongly suggest checking with your tax advisor to consider your options before taking any action.
Ok everyone consider yourself back in-the-know. Have a very 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.