Foreign banks boost shekel against dollar to NIS 4.8460

Strong dollar selling by foreign banks in Israel is boosting the shekel against the dollar to NIS 4.8460, up from Wednesday's representative exchange rate of NIS 4.864.

Early in the morning the dollar rose to NIS 4.87, soon sliding to NIS 4.8560.

Yesterday, the shekel weakened on reports of the planned capital gains tax of the Finance Ministry, as part of the emergency economic plan.

The local branches of foreign banks sold tens of millions of dollars at the opening of trade, probably on instructions from abroad. The selling could indicate that foreigners believe the dollar has reached attractive levels for profit taking.

Dealers reported weak activity as players apparently prefer to wait and see how trade develops. "The dollar has a strong resistance level at NIS 4.8750," a leading dealer said. He believes the market is trying to come to terms with the planned capital gains tax.

Bank dealing rooms reported exceedingly big volume yesterday, and that action attracted all entities, local and foreign banks, companies and speculators.

Dealers expect the shekel to continue weakening, although they don't rule out dollar selling in the short term.