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The dollar appreciated by 0.6% against the shekel in the Israeli forex market on Tuesday, dropping to 4.168 per USD. Summing up the trading week so far, the dollar has weakened by about 0.5% against the shekel.

In the morning the shekel-dollar rate was flat.

As of writing the dollar was gaining 0.45% against the shekel to NIS 4.171.

The forex market has become extremely volatile: from the start of May, the shekel has weakened by a steep 7% against the U.S. dollar.

Zachi Eliash, manager of the forex and interest dealing room at Bank Leumi, says that fears of inflation and rising yields have calmed down overseas, which boosted emerging markets, including Israel.

Yields on long-term U.S. T-bills sank from 5.32% to 5.14%, which lowered yields on Israeli government bonds as well, Eliash says. The shekel in response strengthened from NIS 4.236 to NIS 4.135 per dollar.

Barring unexpected developments, Eliash expect the dollar to hover between NIS 4.10 to NIS 4.175, and to be influenced mainly by events overseas.