1. The Exchange Rate

Strengthening of the shekel
against the dollar, with a weakening of the dollar worldwide.

In April, the shekel strengthened by
about 0.4 percent against the dollar, and weakened by 1.5 percent against the
euro.

Against the currencies of Israel’s
main trading partners, in terms of the nominal effective exchange rate of the
shekel (i.e., the trade-weighted average shekel exchange rate against those
currencies), the shekel weakened by about 0.5 percent in April.

Worldwide, the US dollar weakened
against most major currencies in April. The dollar weakened by 1.8 percent
against the euro, by 0.5 percent against the Japanese yen, by 0.7 percent
against the Swiss franc, and by 3.7 percent against the British pound.

 

 

 

2. Exchange Rate Volatility

A decline in actual volatility of
the exchange rate in parallel with a decline in implied volatility.

The standard deviation of changes in
the shekel-dollar exchange rate, which represents its actual volatility,
declined by about 2.7 percentage points in April, to 6.1 percent at the end of
the month.

The average level of implied
volatility in over the counter shekel-dollar options declined by about 0.8
percentage points, to 7.3 percent at the end of April.

In parallel, the implied volatility in
foreign exchange options in emerging markets declined, to an average of about
10.1 percent, and the implied volatility in foreign exchange options in
advanced economies also declined, to about 8.3 percent at the end of April
(Figure 4).

The implied volatility in foreign
exchange options trading is an indication of expected exchange rate
volatility.

 

 

3. The Volume of Trade in the
Foreign Currency Market

Total trading volume declined,
with an increase in nonresidents’ relative share of total trading volume.

 

Total trading volume in foreign
currency
in April was about $133 billion, compared with about $179 billion
in March.[1]
Average daily trading volume increased by about 2 percent, to about $8.3
billion.

 

The trading volume in spot and
forward transactions (conversions)
was about $25 billion in April. Average
daily trading volume in those transactions was unchanged in April at about $1.6
billion.

 

The trading volume in over the
counter foreign currency options
(which are not traded on the stock
exchange) totaled about $2.8 billion in April. The average daily trading volume
in those options declined compared with March, to about $176 million.

 

The trading volume of swap
transactions
was about $104 billion in April, compared with about $134
billion in March. Average daily trading volume in swap transactions increased
by about 7 percent compared with the previous month, to around $6.5 billion.

 

Nonresidents’ share of total trade
(spot and forward transactions, options and swaps) increased to about 40.5 percent
at the end of April.

 

 To full press release, including graphs and data

To graphs & data​


[1] It is worth
noting that there were fewer trading hours in April than in March.