Dollar, Euro Drop Against Shekel

Both foreign currencies lose more than 1% of their value.

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The euro and the dollar took a tumble against the shekel on Thursday, with both foreign currencies losing more than 1% of their value as the Swiss franc soared.

The euro weakened to a Bank of Israel rate of 4.5678 shekels, a decline of more than 1.3% for the day, while the dollar lost just over 1% to fall below 3.9 shekels and end at 3.8990 shekels. In late trading the two currencies recovered some of their lost ground and were trading at 4.5538 and 3.9267, respectively.

The Swiss National Bank shocked financial markets on Thursday by scrapping a three-year-old cap on the franc, sending the safe-haven currency soaring against the euro and stocks plunging amid fears for the export-reliant Swiss economy.

Only days ago, SNB officials had described the 1.20 francs per euro cap, introduced in 2011, as the cornerstone of the bank’s monetary policy. The U-turn sent the franc nearly 30% higher against the euro in chaotic early trading.

In spite of Thursday’s dollar weakness, Elad Solomon, senior analyst at UTrade, said he expected the greenback to resume its long-term strengthening and reach about 4.15 shekels “against the background of continued political uncertainty in Israel and an appreciating dollar worldwide.”