The shekel is trading unchanged against the dollar at NIS 4.77, 0.3% above Friday's representative exchange rate, and similar to the level of the dollar in Sunday options trade.
Dealing rooms noted that trade has been calm lately, and that standards deviation dropped to 8.8%. The calm in the foreign currency market, and the shekel hike against the dollar are accompanied by gains posted on the Tel Aviv Stock Exchange, and by calm on the bond market.
Investment bank Excellence estimates the dollar could drop in the short term to NIS 4.73 given relative calm in the fighting in the region, and assuming the cabinet and the Knesset approve the new economic plan. Excellence notes the dollar has recently traded at NIS 4.68 to NIS 4.81, in response to developments, and that at NIS 4.81 there was large dollar supply.
Bank of Israel Governor David Klein is slated to announce interest rates for May today at 16:30. It is beleived Klein will leave rates unchanged at 4.4%. This is supported by data such as March's consumer price index 0.5% rise, which had been expected, and the drop in inflation expectations for the coming year. Other factors supporting leaving interest rates as is: the devaluation of the shekel has been halted, and the severe recession.