Breaking News

Vimpelcom Agrees to Sell 51% of Djezzy to Algeria for $2.64 Billion
Tweet TWEET

Israel Shekel Weakens as U.S. Mulls Military Attack on Syria

The shekel posted the steepest two-day loss in more than three months after U.S. Secretary of State John Kerry said Syria will be held accountable for using chemical weapons.

The shekel depreciated 1.2 percent to 3.6519 a dollar, at 5:45 p.m. in Tel Aviv, taking the two-day decline to 1.7 percent, the most since the two days ending May 14. The currency is today the fifth-worst performer among an expanded list of 31 major currencies tracked by Bloomberg. Israel’s TA-25 benchmark stock index slumped 2.4 percent to 1,156.19, the lowest level since Sept. 23.

Global stocks fell as the Obama administration vowed to hold Syria’s government responsible for using chemical weapons and with its allies moves closer to a decision on retaliatory military strikes. Hossein Sheikholeslam, the Iranian parliament’s director-general for international affairs, yesterday told the state-run Fars news agency that Israel risks being the “victim” if any attempt is made to attack Syria.

“Foreign investors are shunning Israeli assets on concern that a possible U.S. attack on Syria will include Israel in an escalation,” said Moshe Nir, a trader at Mercantile Discount Bank Ltd. in Tel Aviv.

The shekel’s 14-day relative strength index climbed to 69.72, data compiled by Bloomberg show. The 70 threshold suggests to some traders the shekel is oversold and a reversal is imminent. The currency appreciated 2.3 percent this year, the best performer among an expanded list of 31 major currencies tracked by Bloomberg.

The yield on the benchmark 4.25 percent notes due March 2023 rose three basis points to 4 percent. Investors sought 5.1 times the 200 million shekels ($55 million) of the 2023 notes sold at today’s Finance Ministry’s auction up from 3.7 times the same amount offered on Aug. 19, ministry data on Bloomberg show. The government sold a combined 900 million shekels in government bonds at the last auction of the month. The Bank of Israel yesterday left interest rates unchanged for a third month at 1.25 percent.

To contact the reporter on this story: Sharon Wrobel in Tel Aviv at swrobel4@bloomberg.net

To contact the editor responsible for this story: Claudia Maedler at cmaedler@bloomberg.net

Bloomberg reserves the right to edit or remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.