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The IsraTransfer Report – November 2018

Updated: Feb 12, 2019

Election season has come and gone and with both local Israeli and now the US mid-terms in the rear view mirror, could a potential reversal of fortune be on the horizon?

Israel Paliament Knesset Elections

Plus, Bank of Israel pulls the plug on digital currency (at least for now), and Birthright seeks to increase its stake in the entrepreneurship business.  Ready to catch up on what’s been going down?  Then check out our latest edition of The IsraTransfer Report.

From the IsraTransfer Currency Trading Desk

It truly was a turn back the clocks kind of month, and not just when it came to daylight savings time either as the USD/NIS soared above 3.72 to heights not seen since the middle of August.  Unfortunately, all good things must come to an end, as the rally petered out heading into the US mid-term elections, declining steadily in its wake.  The Democrats retaking control of the House of Representatives has not been well received when it comes to the dollar, which has led to shekel strengthening against the greenback in the days since.

Going forward, the buzz is beginning to pick up that the new Democratic House majority could throw a wrench in President Trumps ambitious economic agenda, and has led to buzz that US dollar strength could be winding down.  With that in mind, and uncertainty assured to ramp up going forward given anticipated wholesale changes to the President’s administration – beginning with the controversial dismissal of Attorney General, Jeff Sessions, we expect to see a weaker intermediate-term trend in the dollar against the shekel for the foreseeable future.

In sterling trading, after bottoming out at 4.63 on September 8th, the GBP/NIS has made quite the remarkable turnaround, fighting its way back to 4.81 by the middle of October.  After a brief pause to refresh that saw a retreat back to 4.71, the rate has once again resumed its march higher and is now approaching 4.83.  From a technical trading perspective, we find ourselves butting up against a key level of resistance here at which it has tried and failed to break through four times now going all the way back to the middle of June.

Right now the trend looks very friendly for those who have been holding out for a higher exchange rate, which leaves us inclined to go with the flow for the time being.  As is always the case Brexit remains a constant wildcard despite beliefs that an endgame could actually be in sight!  With that in mind, we aren’t opposed to exchanging sterling for shekels while the rate is above 4.80, although holding on to see if it can break out over 4.84 sure seems tempting.

Stay on top of daily trading in the shekel, plus notable news, economic announcements and more with IsraTransfer’s free Daily Shekel Report newsletter.

Keep the Change…For Now

Cryptocurrency may be the future Israel, but unfortunately for those who have been pining for a national digital currency we’re not quite there yet.   While many central banks around the world are examining the possibility of issuing digital currency no advanced economy has yet issued digital currency for broad use. That said, with the technology only continuing to develop, the Bank of Israel has now established a team to study the issue.

Long among the primary motivations for a government issued e-shekel have been to help increase the efficiency in the country’s payment system, as well as to assist in its war against the Israel’s “shadow economy.”   However, given technological challenges presented in the current global financial environment, as well as the impacts the issuance of a central bank digital currency (CBDC) could have on the Bank of Israel’s overall monetary policy (including when it comes to its cash management) any immediate action is now on hold.

While the team does not recommend that the Bank of Israel issue digital currency at this time, it has deemed it necessary to continue examining the field and to follow developments around the world.  As such, the team will continue working to study and monitor the issue, and will report to the Bank of Israel’s management semi-annually.

Membership Has Its Privileges

Think Birthright is just about free trips to Israel?  Think again.

In hoping to cultivate future business dealings between the United States and Israel for years to come the not-for-profit educational organization recently held its Birthright Excelerate18 Summit in promotion of its innovative entrepreneurial fellowship program.  This year’s two-day event was held in New York, and featured a star-studded roster of keynote speakers highlighted by CEO of Zuckerberg Media (and sister of Mark Zuckerberg) Randi Zuckerberg,

The Birthright Excelerate fellowship program offers enterprising North American Jewish college and post-graduate students lifelong membership benefits, kicking off with a 10-week professional summer experience in none other than Israel’s startup company capital of Tel Aviv.  As  part of the experience students are paired with an Israeli participant, who provides a personal bridge to Israeli society, potential partnerships and lifelong relationships.

Participants in the program are offered two tracks in which to cultivate their entrepreneurial talents, including an intensive tech startup pre-acceleration Ventures Bootcamp providing mentoring, and other resources to help these thought leaders to tomorrow in the development and launching of their own enterprise.  For those with an interest on the numbers end of things, the program’s Internship track places Fellows at leading global biotech, finance, and venture capital firms where they can hone their business development skills.

Since its inception community the Birthright Excel community has grown to 675 Excel Fellows from the US, Canada, Mexico and Israel, 90 Israeli Mentors and 30 North American Advisors. 

For more on Birthright Israel Excel visit their website now.


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