The shekel slipped against the dollar on Wednesday for the first time in six sessions but stayed at a five-month high, underpinned by high Israeli interest rates that have reduced interest in the U.S. currency, dealers said.

The representative, or official rate, against the dollar was fixed at 4.6390 shekels - its strongest point since March 21 - from 4.6230 on Tuesday.

"There was some inter-bank dollar buying after the dollar slipped yesterday to cover positions," said a dealer at Union Bank.

"But in general there was not much interest in buying or selling dollars today from companies or any other clients.

"The difference between Israel and U.S. interest rates is still keeping the shekel strong," he added, noting the 7.35 percentage point gap between Israel's key lending rate of 9.1 percent and the U.S. federal funds rate of 1.75%.

He said an escalation in Israeli-Palestinian violence despite Israel's withdrawal of troops from Bethlehem and the Gaza Strip on Tuesday as part of a security deal with the Palestinians may have shaken the shekel, but the impact had been minor.

Israeli tanks and helicopters raided a Gaza Strip refugee camp before dawn on Wednesday, destroying buildings and killing a Palestinian man after a house collapsed on him.

The raid followed the shooting by Hamas militants of an Israeli soldier guarding a Jewish settlement. An army statement said forces destroyed two empty buildings which "served terrorists as shooting posts and shelter".

The dollar had strong support at 4.60 shekels with resistance at 4.65 shekels," the Union Bank dealer said.

The basket of foreign currencies composed of the dollar, euro, pound sterling and yen, was fixed at 4.8409 shekels against 4.8260 shekels on Tuesday.

On the crosses, the shekel traded at 3.9166 shekels per 100 yen compared with 3.8894, against the euro at 4.5321 shekels from 4.5266 and against the pound at 7.0703 versus 7.0517.

In the late afternoon, the shekel was trading at 4.6365 to the dollar.

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