Shekel strengthens against dollar to NIS 4.7730

Dealers expect shekel to continue gaining ahead of options expiry rate to be set in afternoon
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The shekel is rising against the dollar to NIS 4.7730, up 0.2% from Monday's representative exchange rate, NIS 4.7840.

The representative rate was set before Bank of Israel Governor David Klein announced an unexpected 0.2% hike in May interest rates, which clipped the dollar in later trading to NIS 4.7750.

Bank of Israel data shows that in the first three weeks of March foreign exchange volume dropped 16%, and standards deviation dropped to 8.5%. The dollar traded in a narrower price range. All this indicates the foreign currency market has settled into relative calm.

Dealers estimate that in coming days the dollar will trade between NIS 4.75 and NIS 4.80 given the contained regional violence. "Klein yesterday clearly signaled that he won't allow the shekel to devaluate and affect price levels," one dealer said. He estimates that in the short range the dollar will cross upward through NIS 4.80.

Dollar options for April expire today, according to the representative rate to be set at 15:30. Dealers expect the dollar to weaken ahead of that event.