Michael Eisenberg writes about how the weakening US Dollar and strengthening shekel (up 11.6% over past year) is affecting business in Israel:

Little noticed in the discussion in Israel about corruption, Prime Minister Olmert’s survivability, economic growth and planning for the next war, is the strengthening Shekel (NIS). Today the Shekel dropped below 4 NIS to the US Dollar for the first time in a long time. The strengthening Shekel is both a result of stellar economic growth in Israel and the falling US currency. I wanted to highlight a few areas which I think bear watching as the Shekel continues to rise (it has risen over 15% in the last 15 months). This is virgin territory for Israelis because for as long as I can remember as a child tourist and now adult in Israel, the shekel always sank against the Dollar.

Here is a graph of the Shekel vs. the US dollar over the past 12 months (from Google):

As an employee of a US company earning a salary in dollars and living in Israel, this is a subject to which I am particularly sensitive (I have taken a virtual pay cut of 11% in the past year due to the strengthening of the Shekel and weakening of the dollar). This article lists some other ramifications of this shift in the traditional Shekel-Dollar relationship. This will also have wide-reaching affects on many North American olim, since so many people are still dollar-based (from savings accounts, jobs and NBN grants) for the first few years after arriving in Israel.