The Tel Aviv Stock Exchange and foreign exchange market reacted nervously to reports that Israel could be about to attack Iran after US President Donald Trump admitted talks over Iran not obtaining nuclear weapons were not going well.
In mid-morning trading the Tel Aviv 35 Index was down 2.19% at 2,676.79 points and the Tel Aviv 125 Index was down 2.49% at 2,685.76 points. Almost all stocks are down led by the banks, with defense electronics company Elbit Systems Ltd. (Nasdaq: ESLT; TASE:ESLT), up 1.25%, bucking the market.
In mid-morning inter-bank trading the shekel is weakening sharply against both the US dollar and euro. The shekel-dollar rate is up 1% at NIS 3.562/$ and the shekel-euro rate is up 1.28% at NIS 4.105/€.
Poria Finance chairman Or Poria says, “The foreign exchange markets are starting the day with sharp volatility, with the shekel weakening significantly against the major currencies. The background to this is a sharp rise in market estimates of a possible attack on Iran in the coming days, which is also reflected in the surge in oil prices, combined with the continuation of the current (Israeli) government’s term, which is perceived as less friendly to the markets. At the same time, we are witnessing a further strengthening of the euro against the dollar, with the European currency already trading above $1.15 per euro. Despite the current volatility, there is no change in the medium and long-term estimates, in which the shekel is expected to strengthen again against the leading currencies.”
Bank Hapoalim chief market strategist Modi Shafrir tells “Globes, “In the last 24 hours, especially yesterday evening, reports emerged that the US is vacating embassies. President Trump spoke out and said that the Americans are ready to attack if necessary. There were headlines abroad that Israel is also ready to attack Iran. All of these headlines, although it is certainly possible that the announcements stem from Trump’s negotiating tactics with Iran, are now coming in contrast to the tone at the beginning of the negotiations.”
Shafrir adds, “The US president said they were getting closer to an agreement, and right now the messages have become more hawkish from the US administration, and also from Israel. All of this is reflected in the rise in oil prices in the world and the weakening of the shekel against the dollar in Israel. Gold prices have also jumped in the last 24 hours.
“An attack by Israel in the short term would lead to the same trend, but in the long term – it is not certain. If there is an attack that really removes the Iranian threat, the shekel will weaken in the short term due to the fear of an Iranian response. But if the attack removes the Iranian nuclear cloud, it will be better in the longer term. All of this depends, of course, on the results of the attack. If there is a bad attack, it will be bad for Israel in terms of the shekel/dollar exchange rate, etc.”
Published by Globes, Israel business news – en.globes.co.il – on June 12, 2025.
© Copyright of Globes Publisher Itonut (1983) Ltd., 2025.
