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The dollar continued gaining against the shekel yesterday, closing at NIS 3.629, 0.6% above the last representative rate.

The Bank of Israel published the representative rates early yesterday, due to the Sukkot holiday.

The dollar gained ground on the global market as well, reaching $1.3588 to the euro.

"Foreign banks had a nice ride on the market today," said Eitan Admoni, the foreign currency department manager at the Bank of Jerusalem.

But other foreign currency traders believe that most of the action was Goldman Sachs buying up dollars and pushing up the exchange rate.

Despite the dollar's strong showing yesterday, Admoni is not optimistic about the condition of the U.S. or European economies. He believes it will take Europe five years, and the U.S. at least a decade or two, to recover economically.

"It isn't just the ramifications of the recent crisis," said Admoni, "but a trade deficit and a federal deficit that total $2 trillion."

For this reason, the dollar ultimately will fall, he believes; the recent gains are a euphoric response to the U.S. emergency bailout plan. Israel, he believes, will not face a recession, but there certainly will be an economic slowdown.

The dollar exchange rate has been affected by global economic events, principally the $750 billion U.S. economic bailout plan. The U.S. government announced yesterday that it plans to invest $250 billion in U.S. banks. This plan, however, has a price, and the U.S. budget deficit will increase to $455 billion in fiscal 2008.