Shekel Surges 1% Against Dollar on Election Day as Global Markets Await Fed

The Israeli shekel is strengthening significantly against the major currencies amid high voter turnout reports in the elections, diverging from global market trends where the US dollar is posting moderate gains. The US dollar dropped 1% against the shekel to trade just below 3.05 shekels, while the euro weakened by 1.4% to 3.40 shekels. Local foreign exchange activity remains limited due to Bank of Israel instructions for the election holiday, which includes the suspension of representative exchange rates and the closure of commercial banks.

Meanwhile, global markets show the US Dollar Index rising 0.2% to 102.2 points, the euro slipping 0.2% to trade above 1.11 dollars, and the British pound edging down 0.1% to trade above 1.33 dollars. In Japan, the dollar advanced 0.2% to 157.8 yen as international investors await the Federal Reserve rate decision and press conference by Chair Kevin Warsh, with no change expected in the benchmark interest rate.

Futures markets price in only a 10% probability of a rate hike, but an 80% chance of an increase at the upcoming December 9 meeting, the final policy gathering of 2026. Brett Ryan, senior US economist at Deutsche Bank, noted that market participants will closely scrutinize Warsh for hints regarding future policy steps, despite the Fed chair's stated aversion to forward guidance.