The Israeli shekel moved off an eight-month high on Thursday 25 June dragged by dollar strength even as investors awaited more cues from the Eurozone as Greece-related negotiations continue.

USD/ILS rose to 3.7775 from the previous close of 3.7518, which was its lowest daily close since late October 2014.

At the low of the pair on 24 June, the shekel was up 2.2% from 22 June when the central bank chief surprised markets with hawkish remarks.

On 22 June, the Bank of Israel decided to leave its base lending rate at 0.1%, which was expected, but governor Karnit Flug's remarks showed the central bank is no hurry to boost inflation or arrest the rally of the shekel, which was a hawkish surprise.

"In light of the expected path of inflation returning to within the target range and the stabilisation of a moderate rate of growth, it appears that the probability that we will be required to use unconventional tools in the near future has declined," Flug said.

Headline inflation in Israel has been in the negative territory since October 2014 but the core rate has rebounded to a near one-year high of 0.5% in May.

Meanwhile, the central bank lowered its 2015 growth estimate to 3% from 3.2% in its last update in March but raised its estimate for 2016 to 3.7% from 3.5%.

It predicted that inflation over the next year ending in the second quarter of 2016 would be 1.6% and the policy interest rate would remain at its current level until the end of 2015 and increase gradually in 2016.

On 22 June, the central bank said its index of leading indicators rose 0.3% in May but revised the index for March and April lower.

Another release on 22 June showed the unemployment rate in Israel has increased to 5% for May from 4.9% in the previous month, which was a multi-year low.