US Dollar reaches six-month high against Israeli shekel

The US Dollar has reached its highest level against the Israeli shekel in six months, trading at approximately 3.10 shekels. This rise follows a 10% increase since May, driven by global economic developments and structural changes within the Israeli economy.

Key drivers include US inflation data that exceeded expectations, raising concerns regarding interest rate paths and economic growth. Additionally, declines in global stock markets, particularly the Nasdaq, have increased demand for the dollar as Israeli investment institutions sell shekels to hedge against market volatility.

Bank Hapoalim warned that fundamental factors supporting the shekel have shifted, noting that the Israeli current account surplus has turned into a limited deficit over the last two quarters. While direct foreign investment remains high, these shifts may increase currency volatility and sensitivity to political and economic developments.