The Bank of Israel spent tens of millions of dollars Monday morning buying the greenback – its fourth intervention since April 8 in a bid to tame the surging shekel.
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Although the central bank stepped into the market twice last week , the shekel is still climbing. A strong shekel threatens to undermine the competitiveness of Israeli exporters.
The intervention helped lift the dollar, which had traded as low as NIS 3.5530 Monday, to NIS 3.5736 by 10:20 A.M. That marked a gain of nearly 0.6% over the Bank of Israel rate Friday.
But currency trader FXCM said other factors may help push the shekel lower, namely the growing tensions with Syria and Lebanon.
“If it becomes apparent that Syria is again restraining itself, the shekel will resume its appreciation,” it said, adding that the central bank’s intervention seemed to be encouraging speculators.
FXCM added that the dollar's next support level would be NIS 3.56. "Only an appreciation above NIS 3.585 could temporarily alter the balance of power,” it said.