Shekel weakens sharply against US dollar at opening

• Author: Guy Ben Simon
• Published date: 25 April 2022
• Publication title: Globes (Rishon LeZion, Israel)

At least two factors are causing the shekel to weaken. Following the determined stance on combating inflation taken by US Federal Reserve chairperson Jerome Powell, expectations have risen of a 0.5% hike in US interest rates in May, and of a similar hike in each of the following meetings of the Federal Open Market Committee, in June and July. The expectation of steep interest rate rises in the US while rates in Israel rise more gradually implies a widening interest rate gap between the dollar and the shekel, leading to a rising exchange rate

The other factor contributing to the weakening of the shekel this morning is the recent falls in US stocks. The...