Shekel Remains Under Firm Pressure, BoI Intervention Offers Only Brief Reprieve

Spot USD/ILS rallies to fresh session highs on geopolitical tensions despite the large-scale intervention programme launched by the Bank of Israel to prop up domestic currency, with the central bank stepping into FX markets for the first time in two years. The BoI's announcement offered only temporary reprieve to the shekel.

• USD/ILS changed hands as high as at 3.9431 before easing off to 3.9266 where it sits at typing. Technically, the next bullish target is provided by the round figure/Feb 22, 2016 high of 4.0000/4.0035.
• The Bank of Israel unveiled a plan to "sell up to $30 billion in foreign exchange" and "provide liquidity to the market through SWAP mechanisms in the market of up to $15 billion". The central bank "will continue monitoring developments, tracking all the markets, and acting with the tools available to it as necessary".
• United Mizrahi Tefahot Chief Economist Ronen Menachem told the Globes that the intervention was predictable and "this step will lead to appreciation of the shekel, partly because the market was not of one mind about what would happen, and there were those who believed that the bank would prefer an interest rate hike".
• Meanwhile, the TA-35 Index has found poise after its largest sell-off in three years. The equity benchmark has added around 0.5% this morning after tumbling on Sunday.