Shekel Rises to 12-Year High as Economy Rides Risk Appetite

(Bloomberg) -- Israel’s shekel traded at its strongest level in more than 12 years, underscoring the country’s economic resilience at a time of growing global risk appetite.

The currency climbed 0.2% on Wednesday to 3.3257 per dollar, the highest since July 2008. It has gained 3.8% versus the dollar this year.

A surplus in Israel’s current account and steady foreign investment in the country’s technology sector, combined with rising stock markets and a broad shift toward emerging market assets, have been the main drivers of the shekel’s strength, according to Modi Shafrir, chief strategist for Mizrahi Tefahot Bank Ltd. in Ramat Gan, Israel.

The shekel’s gains have defied warnings from Israel’s central bank that it’s close to levels that may prompt intervention in the market.

“The Bank of Israel has indicated that it only moderates long-term appreciation pressures,” Shafrir said. “But it cannot prevent them.”

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