The shekel weakened 12% against the dollar in 2012 and gained 1.2% against the euro over the past 12 months. The shekel-dollar exchange rate opened 2014 at NIS 3.47/$, while yesterday the Bank of Israel set the shekel-dollar representative exchange rate at NIS 3.889/$, down 0.486% on Tuesday's rate. The Bank of Israel also set the shekel-euro representative exchange rate at NIS 4.725/€, down 0.564%.
The shekel lost most of its ground against the dollar in the second half of 2014, during and after Operation Protective Edge. However, there was something of a recovery in the final few weeks of the year with the shekel moving down from the threshold of NIS 4/$.
There is no foreign currency trading today on global markets due the New Year holiday. However, in futures trading this morning the shekel is weakening against the dollar by 0.11% at NIS 3.893/$ and strengthening 0.27% against the euro at NIS 4.711/€.
Yesterday, the Central Bureau of Statistics published a preliminary estimate that GDP growth in Israel was 2.6% in 2014, down from 3.2% in 2013. On Monday, the Bank of Israel raised its growth forecast for 2015 from 3% to 3.2%.
Epsilon Investment House Ltd. chief investment manager Idan Azulay said, "The GDP figure was not a surprise and indicates moderate growth in 2014. However, it is impossible to ignore that growth over the year was influenced by Operation Protective Edge and investment in fixed assets was negatively influenced by the 0% VAT bill which hit the construction sector. Looking to 2015, it can be said that more than anything else the economy needs an engine of growth, and a good conductor. The figures published today show that the economy has major growth potential but needs someone who knows how to realize it.
Published by Globes [online], Israel business news - www.globes-online.com - on January 1, 2015
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