Updated: Dec 10, 2019
The markets in Israel generally act out of the ordinary over the Chagim. Now that we're back to business-as-usual, we have a more accurate view of Israel's currency.
Both the US$ and GBP are in a holding pattern waiting for the next move.
Brexit enters a new season with the latest extension granted by the EU until January 31, 2020. With the extension secured, the UK is heading for a General Election on the 12th of December. The polls would suggest that Boris Johnson and the Conservative party will win the election, but they've been wrong before. The Conservatives are going to need to gain a majority in Parliament to push through the Brexit Bill. We will have to wait and see what happens, which is also what we have to do for Sterling.
We saw a big move up for Sterling a few weeks ago on the news of the possible Brexit deal negotiated by Boris Johnson. It is slightly surprising that Sterling didn't fall too much when Parliament stopped the deal. However, the markets are probably confident that things are moving in the right direction, so there may be more certainty in the coming months.
The US dollar has not moved too much over the last month, trading consistently above 3.5. President Trump is still slating the Fed for not cutting interest rates more aggressively, and we expect the Fed to give in slightly and lower interest rates at their meeting this week. We believe they factored this into the current exchange rate.
There is also talk of the Bank of Israel cutting rates at their next meeting. It seems to have been factored into the exchange rates we currently see.
In short, it is all a case of wait-and-see as to which direction the markets move to break out of the current range.