The shekel continued to strengthen against the dollar and euro in morning inter-bank trading. The shekel-dollar exchange rate fell 0.11%, compared with yesterday's representative rate, to NIS 3.683/$, and the shekel-euro exchange rate fell 0.7% to NIS 4.938/€.
In international markets, the dollar is traded at $1.341/€ against the euro.
Yesterday the Bank of Israel warned that the new government will be forced to cancel tax exemptions and cut expenditure otherwise the budget deficit will rise to 4.9%. The Bank of Israel added that by only cutting expenditure but not raising revenues, the deficit in 2013 would be 3.6% - above the government target of 3%.
FXCM Israel said that the shekel-dollar exchange rate is maintaining a status-quo in trade with little momentum in either direction. "The two currencies are being traded within a very clear band of NIS 3.66/$ and NIS 3.71/$. Only a breakthrough upwards or downwards will help evaluate the future direction of the two currencies. The shekel and euro too reflect the strength of the Israeli currency. If the exchange rate of the two currencies cannot climb above NIS 4.98/€ then it will again fall."
