Bloomberg News

Shekel Jumps to 15-Month High as Israel-Turkey Reconcile

March 22, 2013

The shekel strengthened to the highest level in almost 15 months versus the dollar as Israel normalized ties with Turkey.

The Israeli currency gained 0.4 percent to 3.65 per dollar by 12:44 p.m. in New York, while Turkey’s lira added as much as 0.3 percent. The Bloomberg Israel-US Index (ISRA25BN) of the largest Israeli companies traded in the U.S. fell 0.3 percent.

Israeli Prime Minister Benjamin Netanyahu and his Turkish counterpart Recep Tayyip Erdogan agreed to normalize ties and reinstate ambassadors in a phone call, according to Netanyahu’s office. Israel apologized for the deaths of nine Turks on an aid flotilla to Gaza in 2010, according to officials from Israel and the U.S. who asked for anonymity. Erdogan accepted the apology, the officials said.

“The ties are positive,” said Guillaume Salomon, chief emerging-markets strategist at Societe Generale SA in London, said by phone. “Any ties that bring Israel closer to some of its neighbors is good news. I’m very positive on the shekel.”

The shekel is the best performer among 13 Middle Eastern currencies tracked by Bloomberg this year, gaining 2.3 percent versus the dollar. The lira has weakened 1.8 percent.

To contact the reporter on this story: Leslie Picker in New York at lpicker2@bloomberg.net

To contact the editor responsible for this story: Emma O’Brien at eobrien6@bloomberg.net


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