What are the forces influencing the strengthening of the dollar?

A Globes article examines the forces behind the dollar's strengthening against the shekel: a policy shift by the Bank of Israel, a US interest rate hike, soaring hedging costs, and geopolitical uncertainty. Kobi Levi from Bank Leumi estimates the central forecast is a rate of about 3.1 shekels in the next three months.

A Globes in-depth article examines the forces behind the dollar's recent strengthening against the shekel. The dollar reached a low of 2.8 shekels between May and June 2026, and is now close to 3.2 shekels. Kobi Levi, head of the Market Strategies Desk at Bank Leumi, explains that the Bank of Israel changed direction and began cutting interest rates and purchasing foreign currency to the tune of nearly $2 billion, while the Federal Reserve raised rates. Hedging costs quadrupled in one quarter, from 0.5% to 2% and more, causing institutional investors to reduce their hedges. Levi emphasizes that there is no real alternative to the dollar as a safe-haven currency, and that the central forecast is for a rate of about 3.1 shekels in the next three months. The article concludes with a disclosure of cooperation with Bank Leumi.