Currency Shock as Dollar Hits Two-Year Low Against Shekel

The Israeli shekel surged on Wednesday afternoon amid renewed optimism for a potential ceasefire in Gaza. The U.S. dollar dropped to 3.502 shekels, marking a two-year low, while the euro weakened to 3.959 shekels.

Hamas announced this afternoon that it had reached a “preliminary agreement” with U.S. Middle East envoy Steve Witkoff regarding hostage negotiations and a possible truce. Israeli officials dismissed the statement as psychological warfare, asserting that Hamas continues to reject the U.S. proposal, which Israel has already accepted.

A senior Israeli source responded: “Hamas persists in its propaganda and psychological games. As Witkoff himself confirmed two days ago, while Israel agreed to the proposal, Hamas remains unwilling. Their counteroffer is unacceptable to both Israel and the U.S.”

On global markets, the U.S. Dollar Index rose by 0.3% to 99.88 points. The euro dipped 0.1% to $1.13, and the British pound slipped 0.3% to $1.347. Yesterday, the dollar gained against major currencies following an unexpected rise in the U.S. Consumer Confidence Index, which hit 98 points in May, well above forecasts of 87.1 and a significant jump from April’s reading of 85.7.

Meanwhile, U.S. President Donald Trump reported “encouraging progress” in trade talks with the European Union. In a social media post, Trump said, “I’ve been informed that the EU moved quickly to schedule meetings - a positive sign. I hope they, like China, will finally open their markets to the United States.”

The currency and bond markets remain highly sensitive to diplomatic and political developments, with traders closely watching both the Middle East negotiations and U.S.-EU trade diplomacy for further shifts.