What is bringing down the shekel? The dollar rose to 3.17 shekels and to a peak since late March

The dollar surged to 3.17 shekels, a high not seen since late March 2026. Economic analysis shows that only about a quarter of the depreciation stems from dollar strength, while roughly 75% is due to shekel weakness. The current account deficit and stock market declines do not fully explain the movement; the gap is attributed to political and security uncertainty.

The dollar jumped today (Tuesday) to around 3.17 shekels, a peak since March 31, 2026, after standing at just 2.95 shekels in August. This represents a 7.1% depreciation in less than three months. Economic analysis indicates that only about a quarter of the decline is due to the dollar's global strengthening, while roughly 75% stems from shekel weakness. The article sifts through possible explanations: the current account deficit is not the cause, as it results from record profits of foreign companies reinvested in Israel. Stock market declines explain about half of the depreciation over the past month. Israel's risk premium, measured by CDS, actually fell during the period when the shekel weakened. The unexplained gap, one-third to one-half of the movement, is attributed to political and security uncertainty, including the renewal of the war against Iran and Netanyahu's pressure on Trump.