The shekel strengthens after the tariff decision: the dollar is below 3.06 shekels

The shekel saw a slight rise on the last trading day of the week following the new tariff decision by President Donald Trump, which also includes Israel (12.5% for Israel). The dollar is down 0.6% and is trading at 3.054 shekels, the euro has weakened by 0.6% to 3.473 shekels, and the pound is losing 0.7% to trade at 4.066 shekels.

In global markets, the dollar index against a basket of leading currencies is rising by less than 0.1% to 101.3 points. The euro and the pound are both down by less than 0.1%, trading slightly below 1.14 dollars and above 1.33 dollars respectively. The Japanese yen is trading near a 40-year low at 163.9 yen to the dollar following the release of national inflation data.

Markets are awaiting the Fed's announcement scheduled for next Wednesday; as of today, there is a probability of over 66% that the interest rate will remain unchanged, and 33% for an interest rate hike.

Against the backdrop of trading and continued American strikes in Iran, the US announced the renewal of tariffs: new duties of 10% and 12.5% will be imposed on 60 trading partners, including the European Union, due to claims of "lax enforcement" of forced labor bans. This was confirmed by senior White House officials. The tariffs take effect today, coinciding with the expiration of measures imposed by President Donald Trump last year. Reuters noted that this is an attempt by the president to realize his election vision of a near-global tariff after the US Supreme Court struck down his broad tariff plan in February.

The reports triggered a rise in US bond yields: the 10-year bond yield climbed by 5 basis points to 4.70%, the highest level since January 15, 2025. The 2-year bond yield rose by 6 bps to 4.36%, and the 30-year bond yield rose by 3 bps to 5.17%.

"The world must be prepared for a double whammy of tariffs, because in practice oil also functions like a tariff... there is a real disruption stemming from a physical shortage of quantities, and on top of that comes a price shock stemming from the tariffs," said Vishnu Varathan, head of macro strategy for the Asia-Pacific region at Mizuho. "I think the world is already feeling more comfortable assessing Donald Trump's style of action when it comes to tariffs—that is, a sharp escalation at the beginning, alongside a willingness to bargain and negotiate later on. In contrast, when it comes to Iran and the Houthis, you can't just 'put the bomb back on the plane' after it has already been dropped." Varathan added that the question of whether the 30-year bond yield will reach 6% is already around the corner.

In Japan, the consumer price index rose by 1.7% in annual terms in June, in line with forecasts. The core price index, excluding fresh food, rose by 1.6%—the first increase in Japan's core inflation since March, mainly driven by the rising cost of oil and fuels.