The shekel devaluation trend lost steam today after peaking at a NIS 4.59 exchange rate. The representative exchange rate broke a record again, as it was set at NIS 4.583, up 0.66% from yesterday's rate. Since the representative exchange rate was set, the dollar has weakened and is trading at NIS 4.575.

The dollar has gained 8.3% since reports first emerged of an impending interest rate cut.

Dealing rooms are reporting increased demand, particularly from local banks. They say that although foreign investors are taking part in trading, not to a great extent.

Foreign currency-linked mutual funds are reporting renewed public interest in foreign currency investments, expected to increase in the next few days. The recent rises in the dollar to NIS 4.56, explain the dealers, follow Klein's statement that he will neither raise interest any time soon, nor be shocked if the dollar makes it to NIS 5. One dealer called these statements "a buy recommendation for the dollar".

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Still, dealers are pointing out the calm foreign exchange trading. The buy/sell spreads indeed remain at 30 to 40 base points, a little more than on a regular market day, but turnover has dropped below $1 billion a day, and deviations from the standard on dollar options have diminished to about 8%. "The market is calmer than in the first days after the interest cut, but nerves are still jangling," said one of the dealers.