YEREVAN, March 5. /ARKA/. Last week the average exchange rate of USD at NASDAQ OMX Armenia stock exchange decreased by 0.29% to 388.75 drams. The weekly trading amounted to 10.33 million U.S. dollars, by 86.13% more than in the previous week. The average selling rate of cash dollar depreciated by 0.16% to 389.92 drams on Saturday.

The greenback may continue losing its value this week due to concerns of market participants regarding a possible intervention of the Central Bank of Armenia and the declining demand for foreign currency. Indeed, according to a weekly review of the Central Bank of Armenia, net sales of foreign exchange by commercial banks at inter-bank market last week amounted to 10.085 million U.S. dollars, which was 55.37% less than the previous week.

Nevertheless, the demand for foreign currency has not been affected much and therefore we can not say there is declining trend in USD value. The average selling rate of cash dollar in Armenia this week will probably be within 388 - 392 dram.

The cost of euro last week in Armenia was determined by events at the global currency market FOREX, where the pair EUR/USD fell by 1.94% to 1.3203. Early last week, the euro was growing in anticipation of the next operation by ECB to provide liquidity. However, on Wednesday, February 29, the European single currency just collapsed after statements by U.S. Fed Chairman Ben Bernanke that the largest economy was recovering at a fairly modest pace. In these conditions the U.S. Federal Reserve is not planning to start full-scale third incentive program.

As a result, the average selling rate of euro cash in Armenia past week decreased by 1.13% to 519.58 drams. We believe that the average selling rate of euro cash will likely be adjusted downward to 515.0 drams.

This week, the dynamics of the euro in the world and, accordingly, in Armenia will be determined by economic news from the FOREX market. Of U.S. statistics we would like to single out the data on the number of employees and the number of new jobs in non-farm payrolls for February, which are expected to be positive. Of European news we would like to stress the revised GDP data for the fourth quarter, as well as the ECB meeting on interest rates and the traditional press conference of its chairman Mario Draghi, scheduled for Thursday, March 8. The European regulator is expected to leave rates unchanged at 1.0%.  The estimated range of volatility of Euro at FOREX market this week is 1, 3050-1, 3350. The average selling rate of euro cash in Armenia will be within 505 - 525 drams.

The average selling rate of Russian cash ruble in Armenia during the previous week declined by 0.80% to 13.30 drams, due to a decrease in the value of the ruble against the U.S. dollar and the rising cost of Armenian dram against the U.S. currency.

Macroeconomic news from the U.S. and the eurozone, as well tensions over Iran may give additional influence to the dynamics of the Russian currency. The average selling rate of the cash ruble in Armenia over the next five trading days is likely to be in the range of 13.10 - 13.40 Drams. M.M. -0-
Michael Verdyan, an analyst at FOREX CLUB, specially for ARKA. The opinion of the author may not represent those of the agency