By Steven Scheer
The shekel strengthened by 1.2 percent against the dollar on Tuesday in what might be the start of a correction after the greenback failed to break through the NIS 4 level.
The shekel had shed 2.5%in the past week following the collapse of the governing coalition after just 20 months and the setting of a new election in March.
It has lost about 16% of its value versus the dollar since July, depressed by a combination of weakening Israeli growth, interest-rate cuts and general dollar strength.
“The [ exchange rate] has moved a long way in a short period of time,” said a dealer at a large Israeli bank. “Dollar-shekel was overbought, and fundamentals agree it was over bought, so we are having a correction.”
The Bank of Israel fixed the shekel at 3.9440 per dollar – its most robust level since December 1 – from 3.9910 on Monday. After the fixing, it gained to 3.926
Dealers said the dollar, which surged from below NIS 3.4 in July to touch a 27 – month high on Monday, had tried but failed to break above the NIS 4 level.The dollar has not been worth more than NIS 4 since September 2012.