The Israeli shekel on Wednesday cemented its position as one of the strongest and most solid currencies in the world, marking gains against the top three currencies -- the dollar, euro, and pound. According to the Bank of Israel, March's foreign currency trade began with the shekel trading at NIS 3.62 per dollar, the shekel/euro exchange rate was set at NIS 3.82, and the shekel/pound exchange rate came to NIS 4.47. Wednesday's dynamic trading day and the gains the shekel marked vis-a-vis all major currencies, especially the 0.74% drop in dollar rates, prompted the Bank of Israel to intervene and purchase foreign currency valued at $300 million in an attempt to curb the trend. The shekel has appreciated by 6% against the dollar over the past year, its strongest level since October 2014. It is also hovering at a 15-year peak against the euro. Bank of Israel Deputy Governor Nadine Baudot-Trajtenberg said Wednesday that "the shekel is overvalued and that has become more prominent in the past few months," adding that the shekel's value "doesn't reflect the strength of Israel's economy." "Foreign exchange intervention is very much on the table and we will continue to use it if we think the exchange rate will depress the economy. ... We feel intervention is effective," she said. The Bank of Israel bought $2.6 billion in foreign currency in the second half of 2016, and another $50 million in January. The shekel is essentially echoing the dollar's behavior in world markets: The American currency has been growing stronger against major currencies such as the euro and pound, especially over political turmoil in France. The uncertainty over far-right leader Marine Le Pen's potential ascent to power and the scandals clouding Republican presidential candidate Francois Fillon's future in the race have increased concern over the potential dissolution of the euro bloc. This scenario may see the already weak euro plummet, and it may also further destabilize the pound, despite Britain's planned exit from the European Union.
Shekel cements position as one of the world's strongest currencies
The shekel has appreciated by 6% against the dollar over the past year • Israeli currency is also hovering at a 15-year peak against the euro • Shekel's value "doesn't reflect the strength of Israel's economy," senior Bank of Israel official says.
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