The shekel strengthened significantly in opposition to the main currencies immediately, following the signing of the stop fireplace settlement for the discharge of Israeli hostages by Hamas. The consultant shekel-US greenback change price was set 1.13% decrease, at NIS 3.2420/$, and the consultant shekel-euro price was set 1.32% decrease, at NIS 3.7635/€. However even earlier than the settlement with Hamas was signed, the shekel gained the title of “strongest foreign money” over the previous week. Based on Bloomberg, the shekel was the most effective performing foreign money amongst thirty fundamental currencies, whereas in response to evaluation by the Financial institution of Israel, in opposition to a weighted common of a basket of 29 currencies of Israel’s fundamental buying and selling companions (“the nominal efficient change price”), the shekel is at its strongest ever. How far may it go?
Tamir Hershkovitz. deputy CEO and head of the Investments Division at Ayalon Insurance coverage, estimates that, within the coming yr, the shekel will attain NIS 3.1 to the US greenback, and that inside two years the change price will fall under NIS 3/$. “If we have a look at the previous twenty years, the trendline may be very clear,” he explains. “Twenty years in the past, the shekel-dollar price stood at NIS 4.7/$. Since then the pattern of a strengthening shekel has been very clear.”
What does the pattern stem from? One issue is foreign money hedging. Financial institution Hapoalim chief market strategist Modi Shafrir: “Due to the necessity of funding establishments to hedge change price threat on international funding, shekel change charges are coordinated with equities indices abroad. If these rise, then the shekel strengthens.”
The story doesn’t finish there although. “Alongside the monetary explanations are explanations to do with the true economic system,” says Hershkovitz. “There may be huge funding by native and international traders at each the monetary and actual ranges within the native economic system.” “We’ve got a structural surplus on the present account that’s even anticipated to rise if the battle ends,” says Shafrir, “and there are direct investments by international entities in Israel on a really massive scale, mainly within the expertise sector.”
Within the background is Isreal’s geopolitical place. “We’ve got right here a significant geopolitical occasion,” says Hershkovitz, “with far-reaching modifications for Israel vis-à-vis Iran, Lebanon, Syria, and maybe in a while Saud Arabia as nicely. In the long run, we now have seen that the pattern of a strengthening shekel continued even once we had been on the top of the preventing, when the top of the battle appeared a good distance off.
“Final evening’s settlement paves the way in which to a brand new Center East, and within the new world order, Israel has clear technological and navy superiority over the nations of the area, and the alliance with the US is stronger than ever. We see an finish to the boycotts and sanctions in opposition to Israel, and a excessive probability of a normalization settlement with Saudi Arabia. We count on the inventory market to proceed rising. The following rally will likely be in bonds, which can profit from a reduce in rates of interest inside the subsequent few months.”
Revealed by Globes, Israel enterprise information – en.globes.co.il – on October 9, 2025.
© Copyright of Globes Writer Itonut (1983) Ltd., 2025.