The shekel weakened against the dollar to hit a representative exchange rate of NIS 4.8680, up 0.5% from Monday's daily rate, NIS 4.8440, and 1.2% up from last Sunday.
The dollar traded today between NIS 4.86 and NIS 4.87.
It appears that those who had thought the shekel devaluation trend was over, and that the shekel was again proving its strength, were wrong. After dropping 15 agorot in a week on the shekel, from NIS 4.96 in options trade last Sunday, to NIS 4.81 this Sunday, the dollar is rallying again.
Bank Hapoalim dealing rooms related the sharp fluctuations in the dollar to many dealers having found themselves in long positions, after assuming the shekel would further weaken further. "The sharp drop in the dollar forced dealers to adjust positions, which resulted in the dollar sharply dropping to NIS 4.81 in Sunday options trade," Bank Hapoalim explained.
The bank said that the dollar breaking through the NIS 4.81 level triggered strong demand that boosted the dollar to its current level. Bank Hapoalim estimates that in the short term the dollar could gain further to NIS 4.92 to NIS 4.93.