After yesterday’s bombshell announcement by US President Donald Trump on US import tariffs, the foreign exchange market is unstable right now. In afternoon inter-bank buying and selling the shekel is strengthening in opposition to the US greenback and sharply weakening in opposition to the euro. The shekel-US greenback trade charge is down 0.19% at NIS 3.702/$, and the shekel-euro charge is up 1.95%, at NIS 4.093/€. The shekel is at its weakest in opposition to the euro in 5 months.
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Yesterday, the Financial institution of Israel set the consultant shekel-dollar charge down 0.162% from Tuesday, at NIS 3.699/$, and the consultant shekel-euro charge was set 0.08% decrease at NIS 3.992/€.
Why has the shekel weakened sharply in opposition to the euro?
The euro is reacting with a pointy acquire in opposition to the Israeli foreign money. The rationale for that is the results of the varied trade charge modifications. The shekel is just not traded immediately in opposition to the euro, however is transformed on the dollar-shekel charge after which on the dollar-euro charge. Thus, when the greenback depreciates sharply in opposition to the EU foreign money. Israel additionally sees the results of the devaluation. Actually, the most important beneficiary of the worldwide mess is the euro. The euro-dollar charge reached $1.09 per euro, the greenback’s lowest since October. “Reuters” famous that the euro is strengthening as a result of plainly Europe is trying extra inward, “Europeans proceed to look at tips on how to stabilize the financial system and proceed development and usually are not coping with reciprocal tariffs. The market likes the calm and settled method on the continent.”
Trying forward
The query that now arises is what is going to occur after the worldwide storm calms down, and the way the heavy tariffs will have an effect on the worldwide financial system. Financial institution Hapoalim chief monetary markets strategist Modi Shafrir notes that a lot is determined by future developments. “There’s a concern that Europe and different nations will impose reciprocal tariffs on the US. In distinction, nations like Israel will possible scale back their taxes on the US.” Shafrir stresses that the present scenario is just not wholesome for the worldwide financial system and is growing ranges of uncertainty on the planet. Within the meantime, traders are fleeing to safer investments. Gold is buying and selling at file ranges at greater than $3,100 per ounce. Additionally, up to now 24 hours, authorities bond yields have fallen sharply, whereas traders are turning to risk-free property.
Revealed by Globes, Israel enterprise information – en.globes.co.il – on April 4, 2025.
© Copyright of Globes Writer Itonut (1983) Ltd., 2025.
