Dollar Dips, Shekel Strengthens: Expert Forecast

Or Poriya, Chairman of the Poriya Finance investment house, has conducted an economic review addressing the turmoil observed over the past week in the markets, including the bond and foreign exchange sectors.

Or Poriya, Chairman of the Poriya Finance investment house, stated:

"The 'silly season' has reached the markets as well. Trading in recent days has been relatively stable, against the backdrop of a certain calm in arenas that have agitated investors in recent weeks. Donald Trump is talking about 'lowering the profile,' and the probability of a military confrontation seems significantly lower compared to recent weeks. At the same time, stabilization is evident in the chip sector, with a significant decrease in volatility."

In the absence of significant macro events, the main market fluctuations are currently driven by the micro level, primarily the earnings season, which is at its peak. In Israel, four of the five largest banks are expected to publish their results this week, and these reports may generate significant fluctuations in the stocks of the reporting companies and their respective sectors.

Leading global indices continue to trade stably near all-time highs, but yields in the government bond market remain at very high levels, with the 10-year US Treasury yield crossing the 4.7% threshold. The central question now is whether this high-yield environment will become a burden on stock markets, or whether the bond market will align with equity optimism through rising bond prices and falling yields.

In the foreign exchange market, in the absence of significant shocks, the shekel has returned to strengthening against leading currencies, with the dollar trading below the 3-shekel threshold. Despite short-term stagnation and volatility, our assessment remains unchanged: in the medium and long term, fundamental forces continue to support the strengthening of the shekel.