"What we are seeing this morning on the foreign currency market is much more herd psychology than economics," said the manager of the dealing room at a major Tel Aviv bank today as the shekel skidded to nearly NIS 5 against the dollar.
"There is no doubt that the magic number '5' is attracting the market, but I think trade could stabilize," he told TheMarker.
According to him, this morning's demand came from all the kinds of players: financial institutions, banks, the public and industrial companies, while the sellers were mostly exporters or companies with surplus foreign currency assets.
"Despite the nerves, there was no dominant player doing the buying, and there were no unusually large transactions."
Other dealers and dealing room managers also reported this morning that demand came from many directions and no sector was dominant in boosting the dollar. As the shekel freefall came close to the start of TASE trade, some dealers estimated that demand came from currency linked mutual funds. However, there have been no signs of this from the managements of the funds.