Shekel gains sharply as markets rally

In afternoon inter-bank trading the shekel is gaining sharply against the US dollar and the euro. The shekel-US dollar exchange rate is down 0.90% at NIS 3.575/$, and the shekel-euro rate is down 1.57%, at NIS 4.031/€.

Yesterday, the Bank of Israel set the representative shekel-dollar rate down 0.857% from Tuesday, at NIS 3.587/$, and the representative shekel-euro rate was set 0.479% lower at NIS 4.077/€.

More Investment House chief economist Yotav Costica explains that the main reason for the strengthening of the shekel is the impressive recovery on the capital markets, particularly Wall Street. “Investors are pricing in a positive announcement from Trump,” he tells “Globes.” “On the night between Wednesday and Thursday, US President Donald Trump announced that a briefing regarding a new trade deal was expected, without giving details. Although his announcement was shrouded in mystery, it managed to spark a wave of optimism in the markets, which led to a jump in future indices, especially Nasdaq. It was later reported that this was probably a trade deal being formed between the US and Britain, a report that served as a catalyst for the increases and appreciation of the shekel.”

Alongside the tailwind from global markets, there are also local factors that affect the exchange rate. Prico Group CEO Yossi Fraiman says that in the short term the shekel is expected to continue strengthening against the dollar due to seasonal activity on the local market. “This week, wage payments are taking place in the economy, which leads to companies operating in foreign currencies being required to convert dollars into shekels in order to pay salaries – a move that increases demand for the shekel and supports its appreciation,” he explains.

Published by Globes, Israel business news – en.globes.co.il – on May 8, 2025.

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