Options trading is pointing to a lower shekel-dollar exchange rate, which is falling 0.33% to NIS 3.96/$, and to a 0.04% drop in the shekel-euro exchange rate to NIS 5.5724/€.



According to Bank Leumi economists, the Bank of Israel is not expected to introduce interest rate hikes in the next few months, but that when a cycle of higher rates does set in, it is expected to bring rates to a "normal level." Bank Leumi’s analysts stated that a return to interest rates of 5-6% (2-3% real interest rates) is "only a matter of time."



The representative shekel-dollar rate ended last June at NIS 3.352/$, at a multi-year low. At the end of 2008, the rate stood at NIS 3.802/$, and peaked at NIS 4.248/$ this year, on April 24.



The representative shekel-dollar rate has reached NIS 4/$ or higher only once during the month of June.



On Friday, the Bank of Israel set the shekel-dollar representative exchange rate at NIS 3.973/$, 0.278% higher than the day before. The shekel-euro representative exchange rate was set at NIS 5.5747/€, 0.914% higher than the day before.