The dollar dropped 0.3% on Wednesday to NIS 3.51 after weak U.S. jobs data cemented expectations that the Federal Reserve won't end its stimulus program this year.
While the dollar set an eight-month low versus a basket of currencies, there were mixed trends for the shekel as the euro rose 0.4% to NIS 4.84. Joseph Fraiman, CEO of Prico Group and Fraiman Holdings, said the Bank of Israel was likely intervene in the currency market if the dollar fell to NIS 3.50.
The greenback came under pressure after data the previous day showed that U.S. employers added far fewer workers than expected in September, suggesting that the U.S. economy may have lost momentum even before the 16-day partial shutdown of the federal government this month. Nonfarm payrolls increased by 148,000 workers last month, the U.S. Labor Department said on Tuesday.
"It's becoming difficult for the Federal Reserve to reduce its stimulus this year," said Shinichiro Kadota, currency strategist at Barclays. Most U.S. primary dealers polled by Reuters now believe that the Federal Reserve will not start cutting its $85 billion-a-month bond buying until March.
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