Shekel Declines against the Dolar Amidst Escalating Tensions and Tragic Jerusalem Attack

Amid reports of an imminent end to the cease-fire and the tragic shooting attack in Jerusalem claiming three lives and injuring seven, the shekel experiences a downward trend today. The dollar responds by surging 0.9%, reaching approximately NIS 3.71, while the euro climbs 0.3%, trading near NIS 4.05.

The dollar is projected to conclude the month with an almost 8% decline against the shekel, a notable shift from its NIS 4.00 valuation at the beginning of November. This contrasts with a more modest depreciation in the global market.

On the international stage, the dollar index decreased by 3.7% this month, coinciding with a sharp drop in US bond yields. This decline is attributed to expectations that the Federal Reserve will initiate interest rate cuts in the first half of 2024. Today, the dollar index rebounds by 0.5% to 103.29 points after hitting its lowest level since August 10 earlier at 102.46.

Simultaneously, the euro experiences a 0.5% dip to $1.091 following unexpectedly positive inflation data in Europe. November's inflation in the Western bloc plummeted to a mere 2.4% on an annual basis—the lowest figure in over two years—compared to the forecasted 2.7%. Core inflation in November stands at 3.6%, defying expectations of a 3.9% increase.

The European Central Bank (ECB) achieves a significant feat with inflation nearing its 2% target, indicating a potential decision to maintain interest rates on the euro and deposits unchanged at its upcoming December 14 meeting.

In response to the economic landscape, Bank of Israel Governor Amir Yaron reassures the public, stating at an online conference at the Stock Exchange, "the Israeli economy is solid and stable, founded on strong and healthy economic foundations.

We knew how to recover from difficult times in the past and quickly return to prosperity. We took a series of quick and determined steps, intended to stabilize the markets and help businesses and households deal with the crisis."