Should I wait for the GPB/USD to Get Stronger Against the Shekel?

I get asked this question all time. The inherent problem is that there is an assumption that the GPB/USD will get stronger, it’s just a question of how long it will take and whether it’s worth waiting. Additionally, the assumption also implies that it won’t get worse.

The truth is, both these assumptions were the norm when I made aliyah in 1998. We were always impressed with people who got paid in pounds or dollars, for it automatically meant that their shekel income would always grow. Historically, the shekel was always unstable currency

Indeed, for that reason, house prices, rent and luxury items were always priced in dollars. However, since 2004 this has not been the case.

In April 2004, £1 would have gotten you you 8.3 NIS, while $1 would have gotten you 4.59 NIS. But that has all changed. Everything is now priced in shekels. Here's why:

Today, June 2020 £1 = 4.25 NIS, while $1 = 3.46 NIS.

Look at the charts below to see the trend of the last 8 years - depressing news for foreign currency holders, especially the British (see the huge dip in June 2016 – that was the day the UK voted to leave the EU).

So while the price can go up and down on a day to day basis (and no one can predict that), the long term trend is downwards.

Of course, long term trends can change. But we need to see the economic evidence in order to make such predictions.

So, my advice to foreign currency holders is don’t wait for your currency to get stronger. Just go ahead and invest in Israel today. What will be we can obviously never know, but what we do know is that you will have your asset in Israel.

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