The U.S. dollar traded stably against the Israeli shekel on Thursday despite the escalation of tensions in southern Israel, which was hit by a barrage of over 70 rockets and mortar shells on Wednesday afternoon.

As of mid-morning trade the USD was trading at 3.4688 shekels to the dollar, roughly unchanged from the night before. The euro was trading at 4.8403 shekels.

A perception of growing instability can spur investors to dump shekels and hunker down in safer assets, such as the dollar. The massive rocket attack on the south, followed by a Israeli army attack on 29 targets in Gaza, could count as growing instability. Yet the markets seem inured to such developments.

In previous days the USD had weakened against the shekel. "Breaking through 3.45 shekels to the dollar on the downside will open the door to levels between 3.35 to 3.37, then even as low as 3.21 to 3.23," predicts Yossi Freiman, CEO of the Prico Risk Management corporation.