The dollar weakened against the shekel: “The markets are exaggerating on all fronts”
• The Fed’s expectations that the markets will cut interest rates in three of the next four Fed meetings are exaggerated – “This is a somewhat extreme scenario, which assumes a significant deterioration in the American economy”
(3.5758 + 0.01%)
The shekel weakened by 0.44% against the shekel, and its representative rate was set at NIS 3.585, following the weakening of the dollar around the world at the end of last week after disappointing data from the US labor market contributed to expectations of a rate cut by the Federal Reserve. The euro
Shed 0.1% and his representative rate was set at NIS 4.05.
Last Friday, it was reported that the US economy recorded only 75,000 jobs in May. Economists’ forecasts were for an addition of 175,000 jobs. If that were not enough, the figures for the last two months were adjusted downward, at 75,000 jobs, so that in fact no new jobs were created to improve the data for the last three months.
The weak figure raised expectations that it would contribute to the Fed’s rate cut. “The Fed can not find a justification for lowering the interest rate in the labor market, but only if it really wants to,” he said, adding that the US contracts already incorporate almost three interest rate cuts by the end of the year, and a 25 percent probability that the interest rate will fall. At the upcoming meeting on June 19. This means that in three of the four meetings the interest rate is expected to fall. This seems to us a somewhat extreme scenario, which assumes a significant deterioration in the American economy, which is not so well with the gains recorded last week in the stock market. “