Shekel Strengthens Amid Progress in Hostage Deal Talks Between Israel and Hamas

The Israeli shekel continued its upward trajectory on Tuesday in the local foreign exchange market, reflecting growing optimism over reports of progress in negotiations concerning the release of hostages held by Hamas. The shekel recorded significant gains against both the dollar and the euro, with the dollar dropping to 3.62 shekels, marking a decrease of about 1.3%, and the euro falling by 0.8% to 3.71 shekels.

The strengthening of the shekel is largely attributed to positive market assessments, with traders increasingly confident that the ongoing discussions between Israel and Hamas are advancing towards a resolution. Analysts in the foreign exchange market are interpreting these developments as an indication of reduced uncertainty in Israel’s political and economic landscape.

The shekel's rally was further supported by comments from US President Joe Biden, who confirmed that the negotiations between Israel and Hamas are in an advanced stage. Biden’s statements followed discussions with Israeli Prime Minister Benjamin Netanyahu, where he highlighted the roles of mediators Egypt and Qatar, both of whom are intensively working to finalize the deal. Biden assured that American officials are “pushing hard” to close the agreement as soon as possible.

This progress in negotiations has provided a sense of hope among investors and the broader market, easing concerns over potential political instability and uncertainty surrounding the ongoing situation.

The positive sentiment surrounding the potential hostage deal is having a direct impact on Israel’s foreign exchange market, with traders responding to the likelihood of an agreement that could bring stability to the region. As long as these negotiations continue to show positive developments, it is expected that the shekel will continue to strengthen against both the dollar and the euro in the short term.