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The shekel has been weakening again as speculators pounce on dollars, fearing that a U.S. reprisal to the terror attacks last week will lead to a regional escalation of violence.

A speculator on options on the Maof-25 index attributed the rise of the dollar not only to fears of a Middle East explosion of violence, but also to anticipation that U.S. stocks will plunge after trade resumes on Monday.

Also, Israel's currency market will be closed until Thursday, due to the Jewish New Year (Rosh Hashana), the dealer said.

The dealer predicted that the shekel will regain ground on Thursday if the various fears turn out to be exaggerated.

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"Remember, there are only five days until the September options on the dollar expire, which exacerbates the market's jitters," the dealer said.

Ilanot Discount economists believe that the dollar will not rise beyond NIS 4.4. They predict it will spend the week trading between NIS 4.31 and NIS 4.26.

The dollar's next representative rate will be set on Thursday.