Armenia: Forex market review for May 2 - 4

07.05.2012 14:38
Armenia: Forex market review for May 2 - 4

YEREVAN, May 7. /ARKA/. Last week, the average exchange rate of U.S. dollar at NASDAQ OMX Armenia stock exchange rose by 0.09% to 392.35 drams with overall trading amounting to 3.85 million U.S. dollars, which was 70.91% less than the previous week. The average selling rate of cash dollar rose by 0.05% to 393.49 drams on May 5. The appreciation of the U.S. currency in Armenia was due to persisting demand for foreign currency, as well as to the ongoing appreciation of the U.S. dollar at international currency markets. This week, against a possible ongoing strengthening of the U.S. currency at global markets and amid the ongoing domestic demand, the U.S. dollar has every reason to continue to grow up to 394.00 drams in Armenia.

However, the ongoing appreciation of the U.S. dollar is very likely to be prevented by the sagging demand for the greenback by individuals and businesses. According to the Central Bank of Armenia review, a total of $5.187 million were sold at intra-banking exchange market by commercial banks last week, which was almost three and a half times less than the previous week. The average selling rate of cash U.S. dollar in Armenia this week will likely be between 392.0 - 395.0 drams.

The euro exchange rate in Armenia last week was determined by events at global currency markets, where the EUR/USD fell by 1.28% to 1.3082. The encouraging business activity index report for the U.S. manufacturing sector in April, published on May 1 has toned down expectations of market participants over a regular program of quantitative economic stimulus from the U.S. Federal Reserve.

However, in the middle of the week the trading activity dropped on the eve of important data from the U.S. labor market. The euro received another downward momentum after a report on the labor market once again disappointed the market participants regarding the rate of recovery of the world's largest economy. Indeed, the number of new jobs in non-farm sector in the U.S. was 115,000, down from projected 168,000. As a result, the average selling rate of cash euro in Armenia past week decreased by 0.93% to 518.95 drams. This week a significant impact on the euro will come from the results of elections in France, Greece and Italy, and also from macroeconomic statistics from the U.S. and the euro zone.

The average selling rate of the cash Russian ruble last week declined by 0.45% to 13.25 drams due to decrease in the value of the ruble against the U.S. dollar against the background of slightly declined oil prices. The cost of the ruble against the U.S. dollar and, consequently, the dram this week will depend on the emerging macroeconomic statistics from the U.S. and the euro zone, as well as the dynamics of oil prices. The average selling rate of the cash ruble cash in Armenia over the next five trading days is likely to be in the range of 13.15 - 13.35 drams.

Michael Verdyan, FOREX CLUB analyst, specially for ARKA.
The opinion of the author does not necessarily represent that of the news agency.


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