Macroeconomics Essay

621 words - 3 pages

Joshua Schwennesen 22259937 05047700
235 Wayside Dr.
Waco, TX 76705 (Economics 1, BUS 121)

The following paper tracks the Israeli New Shekel against the United States Dollar from January 2006 through January 2011 and is designed to highlight the underlying causes of the currency fluctuations during this period of time.

ILS per 1 USD

The above chart shows the relative exchange rate between the Israeli New Shekel and the US Dollar.

On January 1st, 2006 the exchange rate between the Shekel and Dollar was 4.61687 Shekels to $1. At this time, the US equities market and economy (and consequently the US Dollar) was in its 4th year of a bull market. This bull market carried both US equities and the US Dollar to all time highs and left the Israeli Shekel at a historically low price against the Dollar.
From January 2006 to July of 2007 the exchange rate between the dollar and the Shekel was relatively stable and ...view middle of the document...

3975 Shekels equaling $1 The average exchange rate between the Shekel and Dollar from January 2006 to January 2011 is 3.941414 Shekels per Dollar.
While researching these currencies, I found it quiet interesting that volatility on each Countries respective equity markets had little influence on the direction of that same Countries currency but rather the fluctuations of the main export commodity of said Country had a greater influence on that same Countries currency. Also contributing to the currency exchange rate volatility was times of violence in either country, specifically in the Middleastern region, which had a significant effect on the exchange rate between the Shekel and Dollar.

Market Vectors Israel ETF (ISRA):

ISRA seeks to replicate as closely as possible, before fees and expenses, the price and yield performance of the BlueStar Israel Global IndexTM. The fund normally invests at least 80% of its total assets in securities that comprise the fund's benchmark index. The Israel Index is comprised of equity securities, which may include depositary receipts, of publicly traded companies that are generally considered by BlueStar Global Investors, LLC to be Israeli companies. It may also utilize depositary receipts to seek performance that corresponds to the fund's benchmark index. The fund is non-diversified.

Fund Overview |   |

Category: | Miscellaneous Region |
Fund Family: | Market Vectors |
Net Assets: | 50.38M |
Yield: | 0.96% |
Fund Inception Date: | Jun 25, 2013 |
Legal Type: | Exchange Traded Fund |

Fund Operations |   |

  | ISRA | Category Avg |
Annual Report Expense Ratio (net) | 0.59% | N/A |
Annual Holdings Turnover | 17.00% | N/A |
Total Net Assets | NaN | N/A |

[ 1 ]. XE Currency Charts (USD/ILS)
[ 2 ]. XE Currency Charts (USD/ILS)
[ 3 ]. Dollar decline or Dollar collapse? By Kimberly Amadeo
[ 4 ]. average/1998-2011
[ 5 ].
[ 6 ].

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