In the News

Shekel hits 4 per USD for first time since 2015 amid Israel-Hamas war

JERUSALEM/NEW YORK, Oct 16 (Reuters) - Israel's shekel weakened on Monday, briefly hitting the psychologically key level of four per U.S. dollar for the first time since 2015 on investor jitters over Israel's war with the Palestinian militant group Hamas.

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Since Hamas launched a surprise attack on Israel on Oct. 7 the shekel has weakened roughly 4% against the greenback. It was last down 0.7% at 3.9981 per dollar.

While the Bank of Israel has never stated a specific exchange rate level at which it would intervene in the market, market participants see four per dollar as a psychologically key threshold.

Part of the shekel’s weakness in recent days is due to investors starting to price in Bank of Israel interest rate cuts starting on Oct. 23.

Last week, the central bank said it would sell $30 billion of foreign currency to maintain financial stability and keep the shekel from weakening too much.

“It’s clear that the repercussions of the last week’s escalation of conflict in the Levant are being felt primarily by the shekel,” said Helen Given, FX trader at Monex USA in Washington.

“Though the central bank has made clear that it will attempt to stem the bleeding for the currency, I don’t see the shekel returning to its levels at the beginning of this month until conflict in the region wanes.”

Reporting by Steven Scheer in Jerusalem; Additional reporting by Gertrude Chavez-Dreyfuss in New York; Editing by Hugh Lawson

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