The shekel is gaining strength Sunday morning, as priced by shekel-dollar options. Against the shekel, the dollar is weakening by 0.15% to NIS 4.8650.

Dealers attribute the shekel's behavior to the surprising 1.5% rise of the consumer price index, reported last week, which created expectations of an interest rate rise.

Market sources generally expect the Bank of Israel to lift lending rates by 1% on Monday next week

The trading volume of shekel-dollar options is low, with only 2,000 options having changed hands by mid-morning. The decline of the standard deviation indicates that the market's uncertainty level has eased.

Dealers say the shekel might have gained even more strength but for the sour economic news, and the anticipated passing of a law next week that will weaken the autonomy of the Bank of Israel.