During the past few months, there have been impacts felt all over the world due to the COVID-19 (coronavirus) pandemic. While much of the attention has been paid to Europe, the United States, and Asia, this virus has impacted every part of the world. This includes Israel, which continues to struggle but the virus. While the virus is certainly a public health issue, it is also led to a number of other major impacts. Economies all over the world are in shambles as governments try to figure out how to stabilize their countries in the midst of a global pandemic that has not been seen in more than 100 years.
Even though Israel has found its own share of impact, the shekel continues to gain against the dollar. Back in July of this year, the shekel was trading at its best rate against the dollar in 30 months. Some people have been wondering why it has taken place. During the past few years, Israel’s economy has continued to struggle. The virus certainly hasn’t helped. In reality, the trading rate as a reflection more of what has happened in the United States instead of what has happened in Israel.
The reality is that the administration in the United States has foundered in the face of the pandemic. Instead of refusing to shut down nationally and encourage masks from the very beginning, the world’s only major superpower instead ignored the advice of global health experts, including those from within its own borders, and allow the virus to spread unchecked. While some states did put shelter-in-place orders in place, it was far too late. The damage had already been done and businesses across the United States started to struggle. Furthermore, some of the biggest brands in the world have filed for bankruptcy. As a result, the US economy crashed, as reflected by the stock market dropping seemingly overnight. Consequently, the dollar fell with it.
As the dollar fell, other currencies started to trade better. This includes the shekel. This means that exchange rates for individuals coming from the shekel to the dollar are at some of the best rates when compared to the past few years. While the dollar has recovered somewhat during the past 30 days, it is still struggling. The United States stock market has rebounded and the shekel is not trading quite as well as it was back in July, but the rates are still favorable. Rates have not been this low since January of 2018.
There are some Financial experts are predicting that the recovery in the United States will be slow. This means that exchange rates might continue to be favorable for the next few months. Even though the country is reopening, the virus is continuing to spread. There are hot spots all over the country and shelter in place orders might have to be put back in place. Furthermore, there are social protests that are continuing to ravage the United States, keeping the economy from rebounding. When this is combined with significant trade tensions that are taking place between the United States and China, it is difficult to find signs that the United States is going to recover anytime soon.
On the other hand, Israel appears to be in a better place. While the virus is still a major problem and is real, the government has done a better job getting its population to listen to the advice of health experts. By maintaining social distancing, wearing masks when going outside, and washing hands regularly, it is possible to reopen the economy in a meaningful way. As a result, most people expect that the economy in Israel is going to recover more quickly. As long as people band together and support each other, the shekel should continue to trade while against the dollar. At the same time, waiting for better exchange rates might not be the best move. It is difficult to predict the future and even though all signs point to an economy that is continuing to struggle in the United States, the stock market has already rebounded slightly.
Right now, the only thing that is for certain is that Global economies are going to continue to struggle until there is a vaccine against this virus. While some people are predicting that a vaccine will be ready early in 2021, this process has been expedited. Some of the leading experts in the world are warning that due to the rush process, the vaccine might not be as effective. The entire world is waiting for the results of clinical trials to see how effective these vaccine candidates are. This could be the key to global recovery.
