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Shekel Remains Under Pressure Despite Reduction In Implied Vols

ILS

The Israeli shekel has regained its position as the worst performer among all EMEA currencies. Spot USD/ILS trades +86 pips at ILS3.6702 at typing, with resistance from the 76.4% retracement of the 2020 - 2021 sell-off/Feb 27 high at ILS3.6892/3.6935 in sight.

  • The escalation of violence in the West Bank and the political turmoil surrounding the government's contentious overhaul of the judiciary have boosted the political risk premium baked into the shekel.
  • Meanwhile, implied volatilities have decreased across the curve, with one-week and one-month tenors pulling back from cyclical highs printed on Monday.

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