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ILS: Shekel Stabilises After Optimism Around Potential Ceasefire Triggered Rally

ILS
EM BulletBulletEmerging Market NewsMiddle East

Growing optimism about the potential ceasefire with Lebanese Hezbollah triggered a rally in the shekel yesterday overshadowing the widely anticipated on-hold rate decision announced by the Bank of Israel. Spot USD/ILS has stabilised this morning, with market participants waiting for fresh developments, and last deals at 3.6495, a tad higher on the session.

  • From a technical standpoint, bulls look for a return above 3.7 and a rally towards Nov 6 high of 3.7693, which would give them some reprieve. Bears see Aug 30 low of 3.6056 as their initial target. The RSI is flirting with oversold territory but is not quite there yet, last sitting at 31.7.
  • Bloomberg cited an anonymous Israeli official as noting that the security cabinet will meet at 15:30GMT/17:30ST to discuss a proposal for a ceasefire with Hezbollah and the decision whether to accept the offer may take several hours. This comes after a flurry of reports suggesting that the deal has been accepted in principle with just a few sticking points left to be addressed.
  • The central bank kept the base rate unchanged at 4.50%, in line with a unanimous sell-side call, in its last monetary policy decision of this year. Governor Yaron flagged inflationary pressures caused by ongoing military conflicts, but the statement suggested that they may "moderate toward the upper bound of the target in the second half of the year."
  • The TA-35 Index has firmed at the margin, adding 0.2% so far.
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Growing optimism about the potential ceasefire with Lebanese Hezbollah triggered a rally in the shekel yesterday overshadowing the widely anticipated on-hold rate decision announced by the Bank of Israel. Spot USD/ILS has stabilised this morning, with market participants waiting for fresh developments, and last deals at 3.6495, a tad higher on the session.

  • From a technical standpoint, bulls look for a return above 3.7 and a rally towards Nov 6 high of 3.7693, which would give them some reprieve. Bears see Aug 30 low of 3.6056 as their initial target. The RSI is flirting with oversold territory but is not quite there yet, last sitting at 31.7.
  • Bloomberg cited an anonymous Israeli official as noting that the security cabinet will meet at 15:30GMT/17:30ST to discuss a proposal for a ceasefire with Hezbollah and the decision whether to accept the offer may take several hours. This comes after a flurry of reports suggesting that the deal has been accepted in principle with just a few sticking points left to be addressed.
  • The central bank kept the base rate unchanged at 4.50%, in line with a unanimous sell-side call, in its last monetary policy decision of this year. Governor Yaron flagged inflationary pressures caused by ongoing military conflicts, but the statement suggested that they may "moderate toward the upper bound of the target in the second half of the year."
  • The TA-35 Index has firmed at the margin, adding 0.2% so far.