Shekel Defies Dollar Strength, Surges Against Major Currencies

The Israeli shekel experienced a significant increase in value against major currencies during the second quarter of this year, despite rising volatility. The Bank of Israel reported that the shekel rose by 5.9% against the US dollar and 6.6% against the euro, outperforming the strengthening of the US currency globally.

The nominal effective exchange rate index showed a 6.1% increase in the shekel's value against its main trading partners' currencies. Meanwhile, the dollar rose by approximately 2.3% against the Japanese yen and 2% against the Canadian dollar during the same period.

The increased volatility was reflected in the actual standard deviation of the shekel's exchange rate against the dollar, which rose by 2.3 percentage points to an average of 10.7%. The implied standard deviation in over-the-counter shekel-dollar exchange rate options also increased by 0.2 percentage points to an average of 9.9%.