The shekel is strengthening further as the currency trading week commences, with the dollar sinking 0.8% compared with its representative rate of Friday.

The dollar is trading at NIS 4.63, compared with its Friday exchange rate of NIS 4.668.

The dollar has weakened by 7.3% against the shekel since peaking at around NIS 5 during June.

Dealers say that trading volumes are average this morning, and that the mood is calm despite the resumption of terror attacks over the last week.

Trade in the spot market has also dwindled, to about $725 million a day, compared with $950 million a day in June, dealers say. Standard deviations have narrowed to about 8%, compared with 10% to 12% during the shekel's rapid devaluation in June.

Goldman Sachs analyst Daniel Tenengauzer predicts that the shekel will gradually strengthen over the coming 12 months, reducing the dollar to NIS 4.45.

Tenengauzer was one of the very few to accurately predict, when the shekel was eroding to NIS 5 to the dollar, that the Israeli currency would reverse its slide. He foresaw that the dollar would first reach about NIS 4.85, while Deutsche Banc at the time was predicting that the dollar would climb in the local market to NIS 5.5.