The anticipated army strike in the Gaza strip weakened the shekel against the dollar, with the representative exchange rate reaching an all-time high NIS 4.918 against the dollar, 0.285% stronger than Wednesday's exchange rate, NIS 4.9040. Since the daily rate was set at 3:30 pm, the shekel has slid rapidly to NIS 4.9429 against the dollar.
Israel is expected to retaliate in Gaza after 16 people were killed in a Tuesday terror attack. It is believed that the terrorist came from Gaza.
IN early trading as the market opened, the shekel climbed against the dollar to below NIS 4.90, quickly started its downward spiral.
Action was mild to begin with, dollar demand rising as the dollar reached highs posted last Sunday. "On the one hand, an 8% leap on Nasdaq justifies selling dollars, but reports on the army getting ready for an operation in the Gaza Strip makes selling them more difficult," one dealer said.
Dealers attributed the dollar hike in the last hour to drops on Tel Aviv Stock Exchange blue chip-index.
Some dealing rooms are directly experiencing the security situation after a number of their dealers were called up yesterday to reserve service. "There's no doubt that the security situation is keeping the dollar at these levels," one dealer said. He noted that activity isn't high, but a trend of selling dollars is indicated among foreign investors. "Yesterday, foreigners sold dollars at NIS 4.90 levels," the dealer said.
Dealers said in the morning that the dollar has strong resistance at NIS 4.92. "Yesterday we saw strong supply when the dollar crossed through the NIS 4.90 level," one told TheMarker. She believes the foreign currency market will continue fluctuating, but several days of calm could bring the dollar back to NIS 4.80.