Analysts quoted by the Bloomberg News Agency say the Israeli shekel may turn out to be the best investment of 2023, according to a report published Tuesday night.
Geoffrey Yu, a currency and macro strategist in BNY Mellon in London, and Peter Kisler, a London-based hedge fund manager at Trium Capital and several other analysts told Bloomberg that although the shekel is currently on a downward trend, it is not expected to stay there for long.
“From a current-account surplus to technology investment and increased natural gas exports, the backdrop has long been favorable for the Israeli currency’s appreciation,” the financial news agency pointed out.
Analyst estimates compiled by the news agency show the shekel strengthening by around nine percent in 2023, outstripping forecast gains for every other developing currency worldwide.
“For the first time in nearly two years, our clients are flat the shekel and there is scope for further gains or purchases up ahead,” Yu told Bloomberg.
“We are tactically long as downside should be capped by intervention if the selloff gets too extreme,” Kisler said.
“We are not ruling out further shekel weakness, but the balance of risks seems skewed to the upside.”
On Monday, Israel’s 10-year real yield rose 34 basis points since January 1, 2023 to 1.18 percent as of Monday, close to a nine-year high, the news outlet reported.
Goldman Sachs Group Inc. said it expects “short-term pain for long shekel bets,” according to the report.
“History is on the currency’s side. March has traditionally been the shekel’s strongest month and it has also tended to gain in April, according to its 15-year average return,” Henrik Gulberg, macro strategist at Coex Partners in London told Bloomberg. He predicted the currency will see a snapback in the next several months.