The foreign exchange market is volatile today after yesterday’s bomb announcement by US President Donald Trump on US import duties. In the afternoon interbank transactions, shekels are bolstered against the US dollar and are rapidly weaker against the euro. The Shekel-US dollar exchange rate fell 0.19% at NIS 3.702/$ and the Shekel eurorate rose 1.95% at NIS 4.093/€. Shekel is the weakest against the Euro in five months.
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Yesterday, the Bank of Israel reduced the Shekel Dollar’s representative rate by 0.162% from Tuesday at NIS 3.699/$, while the typical Shekel Eurorate was set at 0.08% lower at NIS 3.992/€.
Why did Shekels weaken sharply against the Euro?
The euro is responding with a rapid profit on Israeli currency. The reason for this is the impact of changes in various exchange rates. Shekels are not traded directly against the euro, but are converted at the dollar sekel rate, then at the dollar and euro rate. So if the dollar depreciates significantly against the EU currency. Israel is also seeing the effects of devaluation. In fact, the biggest beneficiary of global disruption is the euro. The euro-dollar ratio reached $1.09 per euro. This is the lowest dollar since October. “Reuters” noted that the euro is being strengthened as Europe appears to be looking more inward. Europeans continue to look at ways to stabilize the economy and continue to grow, and do not deal with mutual tariffs. The market likes a calm and calm approach on the continent.”
Looking ahead
The current issue is what will happen once the global storm settles, and how heavy tariffs will affect the global economy. Modi Shafria, the chief financial market strategist at bank Hapolim, points out that it is heavily dependent on future developments. “We fear that Europe and other countries will impose mutual tariffs on the US. In contrast, countries like Israel may cut taxes on the US.” Shafrir emphasizes that the current situation is not healthy for the global economy and that the level of global uncertainty is increasing. In the meantime, investors are fleeing to safer investments. Gold is trading at record levels at over $3,100 per ounce. And while government bond yields have dropped sharply over the past 24 hours, investors are turning to risk-free assets.
Published by Globes, Israel Business News – En.globes.co.il – April 4, 2025.
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