The Israeli shekel slightly weakened against the U.S. dollar on Thursday as the dollar amounted to NIS 3.12, after hitting a 25-year high earlier in the week.

The shekel had reached a peak at NIS 3.08 against the dollar before the Bank of Israel intervened and purchased foreign currency to weaken it.

“It’s reasonable to assume that the basic factors contributing to the strengthening of the shekel will continue,” said Anath Levin, who heads the Israeli office of the global management company BlackRock Inc., reported the Israeli business daily Globes.

Levin said the rise in inflation in the United States could lead to a decision to increase interest rates, which would likely strengthen the dollar.

“Hiking the U.S. rate is expected to strengthen the dollar, among other things, against the shekel, and that could benefit exporters and provide some quiet for the Bank of Israel unless the Bank of Israel also raises the rate,” she continued, according to the report.

However, she added, “the Bank of Israel also sees inflation as temporary, and in its estimation, the rate will remain low for a long time.”

JNS

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