U.S. dollar in Armenia to cost 407-412 drams this week

29.05.2012 13:58
U.S. dollar in Armenia to cost 407-412 drams this week

YEREVAN, May 29. /ARKA/. Last week the cost of USD at NASDAQ OMX Armenia stock exchange grew by 1.93% to 407.22 drams as overall weekly trading amounted to $33.16 million, a 89.49% increase over the previous week. The average selling rate of cash greenback rose by 2.11% to 409.77 Drams on May 26.

Throughout last week average weighted rate of USD was demonstrating sustainable rise thus reaching the new record point since August 7 of 2006 to 408.50 drams. This was prompted by
stable rising of the U.S. currency in Armenia last week due to persisting demand of the investors and population for foreign currency, as well as to the ongoing appreciation of the U.S. dollar at international currency markets. The possible withdrawal of Greece from the euro zone as well as debt crisis’ sprawling over some other countries are also enhancing demand for the U.S. dollar in Armenia.


This week, due to possible ongoing strengthening of the U.S. currency at global markets and amid the ongoing domestic demand, the U.S. dollar is likely to continue growing to 410.0 drams in Armenia.

However, the ongoing U.S. dollar’s strengthening may be hindered by the regulator’s policy to enter trades in order to support the national currency from sharper depreciation.

According to the Central Bank of Armenia review, a total of $27.465 million were sold at intra-banking exchange market by commercial banks last week, which was 77.78% higher from the previous week. Thus, the average selling rate of cash U.S. dollar in Armenia this week will likely be between 407 – 412 drams.

The euro exchange rate in Armenia last week was determined by events at FOREX global currency market, where EUR/USD pair fell by 2.06% to 1.2515 as well as USD dynamics against the Armenian dram. The pair was seriously impacted by concerns around perspectives of Greece to stay within the euro zone and possible consequences of the country leaves the currency bloc. The unexpected statement made by Greece’s former prime-minister that his state is getting ready to leave the euro zone just aggravated nervousness in the markets. The results of the non-official EU states summit didn’t bring any optimism either.

Negative economic statistics from the euro zone also made the euro decrease. The index of business activity in Germany from the IFO Institute dropped to 106.9 versus 109.9 in April proving the possibility of further deterioration in sentiments.

Average selling rate of euro cash in Armenia on the contrary rose by 0.28% to 513.50 drams last week due to fall of AMD against USD.


This week, the uncertainty in the euro zone as well as concerns around the worsening banking situation in Spain may go on with pressing euro. Euro dynamics will be also impacted by economic data from the USA and euro zone.

Of the American data we should focus on the purchasing managers index (PMI), the number of new jobs announced by ADP agency and the change in the number of non-agricultural employees in May, as well as the reviewed first-quarter GDP of this year. Of the European news we should highlight the publication of the composite PMI index in May. The expected moderately positive statistics from overseas may somehow support euro.

However, a very optimistic data from the United States may provoke some new USD purchases thus reducing the attractiveness of the European currency.

In the coming week the expected fluctuation range of euro at FOREX market will be within 1.2350-1.2700. The average selling rate of euro cash in Armenia this week will be within 507 – 520 drams.
The average selling rate of the Russian ruble fell by 0.77 % to 12.85 drams last week due to decrease in the ruble’s value against USD touched off by concerns in Europe as well as oil prices tumbles.
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 United States and the euro zone, as well as the dynamics of oil prices. Deteriorated political backdrop in Europe and the forecasted positive data from the U.S. labor market may cause further ruble drop. However, if economic data from overseas appear not so optimistic and the European statistics is better than expected the Russian currency may advance. The average selling rate of the cash ruble in Armenia over the next five trading days is likely to be in the range of 12.70 – 13.00 drams.

Mikael Verdyan, analyst at GK FOREX CLUB, specially for ARKA
The opinion of the author may not necessarily reflect the opinion of ARKA.—0–


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