07:09 AM EDT, 05/16/2024 (MT Newswires) -- The Israeli shekel softened against a rising US dollar and underperformed other Middle Eastern currencies ahead of the North American open on Thursday after the first-quarter economic activity underwhelmed expectations.

USD/ILS was quoted 0.32% higher at 3.6768, leading the shekel to edge lower against all other Middle Eastern currencies except the Turkish lira and Yemeni rial, after the Central Bureau of Statistics said GDP rose 14.1% last quarter.

That partially reversed the 21% decline seen following the outbreak of the war in Gaza during the final quarter but underwhelmed some economist's expectations. There was no consensus reported for the Q1 figure.

"GDP growth this year is now looking more likely to come in at closer to 1.5% than the 1.0% we currently forecast," said Liam Peach, a senior emerging market economist at Capital Economics.

"For the central bank, the rebound in domestic demand alongside the latest strong inflation figures - which surprised to the upside at 2.8% y/y in April - reduce the chances of another interest rate cut any time soon," he added.