Moderate rise in the dollar in the local market to 3.03 shekels — second day of strong gains

The dollar is strengthening in the local market, contrary to the trend of the American currency in foreign fields: it is rising by 0.3% against the shekel, trading at 3.03 shekels. The euro is climbing by 0.5% and trading above 3.51 shekels. In global markets, the dollar index, against a basket of leading currencies, is falling by 0.2% to 99.4 points. The euro is rising by 0.1% to around 1.16 dollars. The pound is rising by 0.1% to around 1.35 dollars.

Notable in the currency market is the continued strengthening of the Japanese yen. Yesterday, the dollar lost almost 1% against the yen to 158.88, and estimates were heard in the market that the source of the rise was intervention by the Japanese government, possibly again with American support. This morning, a further rise in the currency is recorded — the dollar is falling by 0.6% to 157.8 yen.

All eyes are now on the US employment report for August to be published tomorrow — ahead of the publication of August inflation data next Friday, September 11, and then the Fed's decision on September 17. According to economists' forecasts, the number of jobs in the US economy grew in August by 56 thousand, after the surprising decline of 23 thousand jobs in July, and the unemployment rate remained unchanged at 4.1%. It seems that a very weak figure will be required to prevent an interest rate hike as early as the September meeting. Markets are currently pricing in a 61% probability of an interest rate hike at the upcoming meeting.

"After the hawkish speech by Fed Chair Kevin Warsh in Jackson Hole, I think the markets have returned to the assessment that the Fed is prepared to act in the near term to return inflation to the target at a faster pace," said Carol Kong, a currency strategist at Commonwealth Bank of Australia.

President of the New York Fed division John Williams said yesterday that the recent surge in US government bond yields is a result of a strong economy, and not of disruptions in market functioning. In a conversation with CNBC, Williams — a permanent member of the Fed's Open Market Committee — said that he is still examining the economic data, and refrained from committing on whether he thinks an interest rate hike is necessary.

"I think we need to wait and see. There are currently no clear signs if the current monetary policy is sufficient to ensure that we return inflation to the target over the next year or two, or if additional actions are required to do so. The latest inflation data were encouraging in this direction, but again, we cannot look only at a month or two. We need to get a full picture and examine all the different pieces of information that are at our disposal," he added.