Israel's shekel jumps to 5-week high amid record election turnout

JERUSALEM, Oct 27 (Reuters) - Israel's shekel jumped nearly 2% to a five-week high on Tuesday as high voter turnout lifted traders' bets that the country's first election since the October 7, 2023, Hamas-led attacks could end Prime Minister Benjamin Netanyahu's tenure.

The currency rallied 1.8% to 3.02 per dollar, its strongest level since September 22.

Data show voter turnout at its highest level since tracking began in 1973, which analysts believe could point to a strong showing for parties opposing Netanyahu's Likud bloc.

Short-term shekel volatility gauges , which traders are ⁠using to hedge the election fallout, have also spiked to their highest level since Israel bombed some of Iran's nuclear facilities in mid-2025.

Large banks such as JPMorgan have predicted the shekel could swing as much as 3% in either direction depending on Tuesday's election result.

Israel's Central Elections Committee reported that 55.7% of eligible voters had cast their ballots within the first nine hours of voting, with six hours to go.

Netanyahu is Israel's longest-serving leader with 19 years in office, but the policies of his right-wing coalition have been divisive at home and ⁠have deepened international isolation.

His main rival, Gadi Eisenkot, a former military chief of staff and security hawk, aims to unseat him with support from parties on the right and centre, as well as the rump of an increasingly marginalised left. Opinion polls show a close race, with neither ⁠leader facing an easy path to power.

Prediction market Polymarket shows odds of Eisenkot becoming prime minister at 66%, up eight percentage points over the past 24 hours. Netanyahu's chances have dropped eight points ⁠to 19%.

The Tel Aviv Stock Exchange was closed on Tuesday. Ahead of the election, the broad Tel Aviv 125 index (.TA125), opens new tab closed 1.8% higher.

While Israel's markets have soared despite three ⁠years of war and political upheaval, some investors see further upside if the opposition defeats Netanyahu in the election, potentially easing regional tensions and political risk.

Reporting by Steven Scheer in Jerusalem and Marc Jones in London; editing by Rami Ayyub and Rod Nickel