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April 19, 2014 / 19 Nisan, 5774
At a Glance

Posts Tagged ‘dollar’

Sinking Shekel-Dollar Rate Good News for Israelis Visiting the US

Wednesday, January 1st, 2014

How low can you get? The shekel-dollar rate sank to a 28-month low Tuesday, and a dollar now is worth only a tad more than 3.46 shekels, compared with 3.50 shekels  a week ago and 3.75 a year ago. A shekel now is worth 29 cents, compared with 25 cents a year ago.

That means that American in Israel wanting to visit family in the United States can buy $100 with only 346 shekels. It also is bad news for American visiting Israel or earning dollars in Israel from abroad, who receive fewer shekels for a dollar.

Tuesday’s trading sent the rate to its lowest level since the spring in 2011, and a foreign exchange specialist told Globes business newspaper, “There is no doubt that the negative pressure on the two currencies remains large and there is a risk of breaking significantly lower. The dollar is at high risk worldwide due to the positive sentiment in capital markets in recent weeks and record levels of share indices.

“If there is indeed a continued weakness of the dollar at the start of 2014, the Bank of Israel must take aggressive action to prevent a collapse. From a technical point of view the shekel-dollar exchange rate is exposed to falling to very dangerous levels such as NIS 3.42/$ and NIS 3.38/$.

The shekel dollar rate has not been this low since August 2011, when it reach 3.4 shekels to the dollar. The only other time it was lower was in 2008, when the rate fell  to 3.26.

Easing of Fears of Attack in Syria Sinks Shekel-Dollar Rate

Wednesday, September 11th, 2013

The shekel-dollar rate sank to a two-year low Wednesday, reaching to as low as under 3.56 shekels to the dollar, after President Barack Obama called off a Senate vote on giving him permission to attack Syria. One shekel now is worth slightly more than 28 cents, good news for Israelis wanting dollars but terrible for exporters and Americans in Israel whose savings or wages are in dollars.

Last week, when it seemed certain that the United States would attack Syria, the rate was more than 3.66 shekels to the dollar.

Analysts expect the Bank of Israel to buy more dollars to jack up the rate if it falls much lower, but similar measures in the past have proven to have little long-term effect. The rate may move back up because of renewed strength in the American dollar worldwide.

However, the shekel  is expected to grow stronger  in the long term because of an improving economy, reduction of the deficit and the continuing development of the new offshore energy industry that is turning Israel into an energy exporter.

Turmoil in Egypt May be Driving Up Shekel-Dollar Rate

Monday, August 19th, 2013

One dollar bought slightly more than 3.57 shekels Monday morning as the shekel lost some of its recent strength, possibly because of the violence in Egypt, according to the Atrade foreign exchange service. The shekel also weakened against the Euro.

The Israeli currency, which most analysts believe will strengthen over the long-term, was trading at 3.53 shekels to the dollar two weeks ago.

The Central Bureau of Statistics reported on Sunday that the Gross Domestic Product (GDP) soared in the second quarter by 5.1 percent annually, far above expectations. Working against the shekel’s strength is the prospect of a stronger dollar, depending on the U.S. Federal Reserve Bank’s tapering off of bond purchases.

In the long term, the Israeli economy is expected to benefit from a windfall in royalties on exported natural gas, which may lead to a cut in taxes and a further rise in consumer spending.

Shekel-Dollar Rate Sinks Below 3.53

Thursday, August 8th, 2013

The American dollar’s worldwide weakness helped drive down the shekel-dollar rate to below 3.53 shekels to the dollar Thursday, the lowest level since September 2011. One shekel now is worth 28 cents.

Analysts have pointed to the lack of certainty over who will replace Stanley Fischer as Governor of the Bank of Israel, but the main influence on the shekel has been the weakening dollar.

Intervention by the Bank of Israel, which bought $100 million of dollars Wednesday, did little to weaken the shekel against speculators who are betting on the shekel dollar rate to continue to drop. The shekel might weaken is and when the Federal Reserve Board explicitly announces it will reduce its bond purchases.

Google to Buy Waze for $1.3 Billion

Sunday, June 9th, 2013

Google will fork out $1.3 billion to buy the Israeli-based Waze social-friendly navigation app, the Hebrew-language Globes business newspaper reported Sunday. Waze’s staff reportedly will remain in Raanana.

Facebook reportedly was in front of the lineup to buy Waze, but Waze rejected the condition that its staff be transferred to the United States. Waze may also have been holding out for more money, and Google came up with the right price.

Apple had been rumored to be a potential bidder, but Apple CEO Tim Cook denied those reports.

Waze has soared in popularity, with more than 50 million users around the world, and that number is growing every day.

Google has shown that it loves Israel. In 2010, it bought up website gadget developer LabPixies for $25 million and interactive video-clip developer QuikSee for $10 million, and has set up a Google office here. Facebook, on the other hand, has closed down the Israeli operations of most of the companies it bought up.

The Waze app allows drivers using smartphone and tablet to share information on driving times and traffic situations, as well as the location of police radar traps, accidents and hazardous conditions. Based on user-shared information, it helps users find the fastest path to their destination taking into account traffic conditions and preferred routes.

The $1.3 billion price tag is more than 40 times the $30 million of financing Waze received less than year ago, three years after it was founded.  Waze’s founders will be instant multi-millionaires thanks to the Google purchase, which has not been officially confirmed.

But no one has denied the purchase eitehr. Waze told Globes “no comment,” and Google said, “We don’t relate to rumors and speculation.”

The influx of another $1.3 billion into Israel is great news for the Finance Ministry and for anyone purchasing items whose prices are based on the dollar. It is terrible news for exporters and for Israelis whose salaries come from the United States.

The influx of dollars will put downward pressure on the shekel-dollar rate, which dropped last week to 3.61 shekels to the dollar.

Last month. Warren Buffet paid out $2 billion to buy the remaining shares of the Iscar precision tool maker, and PepsiCo and Coca Cola are now rumored to be offering approximately $2 billion for the Israeli SodaStream manufacturer of machines that convert tap water into soda, and which had become an international hit.

The influx of those big bucks, along with the prospects of Israel’s exporting gas and bringing in more foreign currency, has strengthened the shekel. It also is a major headache for corporations and wage earners whose profits and salaries are in dollars and then converted to shekels.

Bank of Israel Governor Stanley Fischer has tried to battle the drop in the shekel-dollar rate by cutting the interest rate by a quarter of a percent, twice in two weeks, and announcing a $2 billion buying binge of dollars. So far, the “Fischer effect” has been negligible and the rate has continued to drop.

Following the report of the Google purchase of Waze, the exchange rate may drop again Monday when currency trading resumes, unless Fischer buys more dollars – lots of them.

Report: PepsiCo Offered $2B for ‘Settlements’ Labeled SodaStream

Thursday, June 6th, 2013

With SodaStream, we could have saved 500 million bottles on Game Day alone. If you love the bubbles set them free.”

PepsiCo is negotiating with Israeli-based SodaStream to buy out the firm for $2 billion, according to the Israeli Calcalist business newspaper. SodaStream’s shares in Germany shot up nearly 20 percent after the report.

SodaStream, listed on NASDAQ, manufactures machines that make carbonated drinks from tap water and also produces flavors, carbon dioxide refills and re-usable bottles.

Officials at the two companies refused to comment on the report or were not available.

SodaStream has become a big hit in the United States, where the company “stole the show” with its commercials during the Super Bowl this year, drawing bitter complaints from carbonated beverage companies, which applied pressure to CBS for SodaStream to tone down its message  that buying carbonated beverages in plastic bottles is bad for the environment. Pepsi and Coke also did not like the idea of SodaStream making fun of their companies, and the original version of the commercial was canned but can be seen below

A buyout by PepsiCo, or possibly by Coca Cola if SodaStream wants to try for a larger purchase, could place the company’s facility in Maaleh Adumim, east of Jerusalem, in jeopardy.

Soda Stream is a favorite target of the Boycott Israel movement because of the plant’s location beyond the old borders of Israel. The rub, as Lori Lowenthal Marcus explained in an article Tuesday night, is that SodaStream’s American-born CEO Daniel Birnbaum promotes hiring and treating Palestinian Authority Arabs just like Jews.

Both Arab and Jews share the company dining hall in Maaleh Adumim, and there are facilities for both Muslim ands Jews to pray.

The Maaleh Adumim factory employs approximately 900 Arabs from Judea and Samaria. “Everyone works together – Palestinians, Russians, Jews,” a Palestinian employee named Rasim at the Maaleh Adumim site previously has been quoted as saying. “Everything is OK. I always work with Jews. Everyone works together, so of course we’re friends.”

The report of a possible buyout sent the shekel-dollar rate down approximately half a percentage point, to below 3.65 shekels to the dollar, because of the possible injection of $2 billion worth of shekels.


Dizzy Dollar Dumps the Shekel

Wednesday, May 22nd, 2013

The shekel-dollar rate has soared 4 percent in the past two weeks, with the latest jump today (Wednesday) prompted by expectations that the Bank of Israel will lower the interest rate again in June.

The rate crossed the level of 3.69 shekels to the dollar on Wednesday after having dropped under 3.55 shekels to the dollar earlier this month.

After Bank of Israel Governor Stanley Fischer announced a plan for a $2 billion buying binge to purchase dollars, the rate jumped towards 3.60 and then moved up again when he sprung a surprise mid-month quarter of a percent cut in the interest rate. The Bank almost always decides at the end of the nth on the interest rate for the following month.

A lower rate makes the shekel less attractive to investors and helps exporters, whose revenue Finance Ministry dollars will be worth more shekels after conversion.

Expectations of another cut to be announced next week caused speculators and investors to dump shekels Wednesday. Analysts are divided on whether the new upward trend of the shekel-dollar rate will continue or if the shekel will regain strength, partly due to plans to export natural gas from offshore discoveries.

Fischer Cuts Interest Rate and Says Bank to Buy 2 Billion Dollars

Monday, May 13th, 2013

Bank of Israel Governor Stanley Fischer announced on Monday a surprise cut the prime interest rate as part of his battle to fight the appreciation of the shekel and help the economy to keep growing. The financial markets responded with the shekel-dollar rate rising more than 1.5 percent to the level of 3.61 shekels to the dollar.

Fischer announced the interest rate cut two weeks ahead of the usual end-of-the-month decision on whether to change the rate.

The dollar was worth only 3.55 shekels last week, dropping over the past several weeks from the relatively lofty level of 3.8 shekels to the dollar.

A lower shekel-dollar rate hurts exports because foreign buyers have to pay relatively more dollars than they would when the shekel is worth less. In addition, exporters make less money after converting foreign dollars into shekels.

Factors in the lower rate are the anticipation of tax revenue from Israel’s natural gas bonanza, which came on-stream several weeks ago, Warren Buffet’s $2 billion purchase of the remaining shares of the Israel-based Isracar tool-making company, the possibility of a $1 billion buyout of Waze by Facebook, and the relatively stable Israeli economy.

Fischer cut the rate by a quarter of a percent, with the new 1.5 percent rate making the shekel less attractive to foreign investors.

After the Bank of Israel’s two small purchases of dollars the past three weeks in an effort to keep speculators from forcing the shekel-dollar rate any lower, Fischer announced on Monday a massive dollar-buying plan on the scale of his purchases several years ago when the shekel-dollar rate sank to 3.30.

The Bank of Israel said the decisions to lower the rate and buy dollars was made “in light of the continued appreciation of the shekel, taking into account the start of natural gas production from the Tamar gas field, interest rate reductions by many central banks – notably the European Central Bank, the quantitative easing in major economies worldwide and the downward revision in global growth forecasts.”

The Bank of Israel added that global growth forecasts, especially for Europe and China have been revised downward, which effect Israel’s economy.

It explained that the program to buy dollars takes into account “the effects on the financial account resulting from the natural gas production” that will result in foreign exchange payments by the gas companies.

“As in the past, the Bank of Israel will continue to operate in the foreign exchange market in cases of exchange rate fluctuations which are not in line with fundamental economic conditions, or when conditions in the foreign exchange market are disorderly,” the Bank of Israel added.

Printed from: http://www.jewishpress.com/news/fischer-cuts-interest-rate-and-says-bank-to-buy-2-billion-dollars/2013/05/13/

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