Dollar Holds Steady Near 3.00 Shekels Ahead of US-China Summit
The US dollar traded stably around 3.00 shekels as global markets anticipated the Trump-Xi summit. Economists note hedging costs and tech export structures impact the local currency.
The US dollar edged up slightly in global markets ahead of the upcoming summit between President Donald Trump and Chinese President Xi Jinping. Locally, the shekel remained stable, trading around 3.00 per dollar with no significant changes.
Global Markets and Forex Trends
In global trade, the dollar index rose 0.1% to 100.7 points. The euro fell 0.2% to trade above 1.14 dollars, while the pound dropped 0.2% to trade above 1.33 dollars. In Japan, the dollar advanced 0.2% to 157.6 yen.
Alex Zbezhinsky, Chief Economist at Meitav, noted that high currency hedging costs could exert pressure on the local currency. He explained that hedging expenses have climbed to nearly 2%, imposing a heavy 'penalty' that may reduce demand for shekels and weaken the local currency.
The Impact of Tech Exports and Current Account
Economists at Leader, led by Yonatan Katz, analyzed the structural factors affecting the shekel. In the second quarter, the current account recorded a deficit of 0.5 billion dollars, following a 0.8 billion dollar deficit in the first quarter.
At the same time, uncrossed exports—primarily driven by Nvidia—surged to 11.2 billion dollars in the second quarter, up from 8.9 billion dollars in the first quarter and 5.7 billion dollars in the same period last year. However, most of this revenue does not actually enter Israel, as it is offset by undistributed profits, leaving the net current account impact neutral.
Anticipated US-China Summit
Global markets are closely watching the upcoming White House meeting between Donald Trump and Xi Jinping. The two leaders are expected to seek ways to reinforce the fragile trade truce amid ongoing disputes over artificial intelligence, tariffs, and sanctions related to Iran.
"The deep mutual respect between Trump and Xi filters into the broader negotiations, though several commitments from China remain unfulfilled," said US Treasury Secretary Scott Bessent.
