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The dollar is trading at NIS 4.49 in dollar option trading, 0.2% below its representative rate, set at NIS 4.498 Friday, a level around which it hovered after the representative rate was set. It is now 1.4% below last week's peak level of NIS 4.555.

Option turnover is low at a mere 1,500 options. In the last few Sundays that figure stood at 5,000 options. According to a dealer in the options market, investors are on standby: "Those interested in buying are waiting, because they have already seen the dollar go to NIS 4.44 last week, and whoever has dollars is in no rush to get rid of them."

According to the dealer, the option deviated in January by a high 9%, indicative of growing uncertainty among the players. Deviations in the longer series are lower at 7% and 8%, which indicates fluctuations and uncertainty will not last in the long term.

According to financial institutions, dollar trading will continue to fluctuate, but no additional shekel devaluation is expected. Redemptions of foreign currency funds and reduced buys show the public also does not expect the dollar to strengthen any further. Last week those redemptions totaled NIS 200 million.

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However, foreign currency acquisitions by foreign banks, such as HSBC (NYSE:HBC), indicate they do believe the shekel will continue to devaluate. The foreign institutions, inactive through the recent devaluations, last week began buying dollars for NIS 4.45 and above. The foreign banks have led shekel devaluation in the past.

Ilanot Batucha Gift analysts estimate the dollar will reach NIS 4.438 to NIS 4.450 in the coming week. They recommend taking advantage of its drop to NIS 4.438 to buy, since they maintain the shekel devaluation trend will continue. Once the dollar reaches NIS 4.3730, say the analysts, the shekel will reverse to revaluation mode.

Meitav analysts are estimating an NIS 4.46 to NIS 4.58 range for the dollar this week. They say low interest, reduced interest differences and the fact foreign currency credit will become less advisable, will all lead to increased shekel devaluation. They say that taxation of shekel instruments will contribute to the strengthening of the dollar.

Foreign currency trade volume remains very high, totaling over $1 billion a day until last Thursday, when it subsided somewhat and totaled $840 million. Average daily turnover in January is $1.45 billion, twice its average in preceding months.

On Tuesday, when the dollar hiked sharply, posted turnover was $1.93 billion, very close to the March 15 peak of $1.94 billion.