June was nothing short of an action-packed month, chock full of currency market moving news that included a somewhat surprise British election outcome and and interest rate increase by the US Federal Reserve.
In spite of everything, the shekel showed its mettle and continued to strengthen, however, new forecasts project that a potential weakening could be on the horizon. Elsewhere, banks are getting regulation-happy when it comes to Olim, women dominate Israel’s lifescience industry, and an important reminder that there will be no U.S. dollar trading on July 4th. Keep reading.
From the IsraTransfer Trading Desk
Politics, politics, politics. It’s what seems to be driving the exchange rates lately. First, in the UK, as we predicted in our last newsletter, a hung parliament in the wake of disastrous election campaign for Theresa May and the Tory Party has had a significantly adverse effect on sterling, leaving the currency now consistently trading below 4.50 (23 year lows). Along with parliament being held together by a string we have also seen the start of the Brexit negotiations, which will most certainly have a main impact on sterling for at least the next 18 months.
Additionally, we saw U.S. interest rates rise, which in most circumstances would strengthen the dollar, but not this time! In fact it is the first time we can recall in over 15 years that an interest rate hike has not caused the dollar to strengthen. With the dollar now trading at three-year lows against the shekel we would expect a correction in the shekel/dollar exchange rate over the next 6 months, but as recent history has shown we are certainly living in some pretty strange times.
Israel Economy Snapshot
As expected sterling experienced a precipitous drop on the heels of disastrous election results for England’s Tory Party. Plus, despite a now 1% gap in interest rates between the U.S. and Israel the shekel continues to strengthen, although Union Bank projects that a trend reversal may be on the horizon.
The Israeli Banking System
In what many are calling unreasonable demands several Israeli banks are tightening requirements for dual citizens, in some cases leading to the freezing of bank accounts for those who fail to comply. The controversial changes have sparked a great deal of debate as financial institutions look to limit their risk. Read more…
And In Case You Missed It...
Science & Technology
While men may hold the lead when it comes to Israel’s general high-tech industry, it’s women who dominate the country’s lifesciences sector, making up nearly 70% of the workforce at both the mid and senior levels.