Armenia: Forex market review, July 2-6

09.07.2012 16:02
Armenia: Forex market review, July 2-6
YEREVAN, July 9. /ARKA/. Last week the cost of USD at NASDAQ OMX Armenia stock exchange rose by 0.09% to 419.00 drams as overall weekly trading amounted to $8.0 million, a 43.26% down over the previous week due to a short working week on the occasion of Constitution Day celebrations. The average selling rate of cash greenback climbed by 0.13% to 420.41 drams on July 7, Saturday.
We think that such USD dynamics is explained by decrease in USD supply and absence of the principal market actors as a result of many days-off.
This week dollar may continue rising if importers and the population go on acting with their demand for this currency. The main reason for such demand is a non-stable situation at the world financial markets.
The American dollar is still regarded by the Armenian currency market as a currency –asylum. We suppose that this tendency should have been touched off by the concerns around slowdown of the global economy and consequences for Armenian economy. The growing American currency at FOREX market also fosters advance of the USD against the Armenian dram.
Nevertheless, the USD may drop or consolidate if the market members demonstrate caution around the Central Bank’s intervention aimed at supporting the national currency against the further devaluation.
As a result, we think an average selling rate of USD cash will be within 418 – 423 drams this week.
The euro exchange rate in Armenia last week was determined by events at FOREX global currency market, where EUR/USD pair tumbled by 2.94% to 1.2289.
Throughout the last week the cost of euro was pressured. At the beginning of the last week euro quotes were slipping as investors were doubtful about the results coming from EU summit. Moreover, the disappointing economic data from the United States, euro zone and China didn’t bring any optimism either. Indeed, the processing industry activity of these states reported drop.
Euro continued falling as the European Central Bank decreased its key interest rate to 0.75%, and its rate on deposits- to 0% while making attempts to support lending and economy stimulation.
Published on Friday, July 6, economic data from the U.S. labor market were worse than projected thus inciting sales of the European currency.
Indeed, the indicator jumped by 80.0 thousand against the forecasted 100.0 thousand in June. According to the reviewed data the number of new jobs in May increased by 77,000 whereas it was earlier reported about 69,000. Even though the number of new jobs in June are more than that of the previous months, the rates of opening new jobs are still much lower from those in the beginning of the year.
As a result, the average selling rate of euro cash in Armenia last week shrank by 1.42% to 525.35 drams. We forecast that as euro dynamics in Armenia stays behind its dynamics at the global market because of time limit of the trading session, an average selling rate of euro cash in Armenia will, probably, drop to 520.0 drams on Monday, July 9.
This week the euro dynamics in the world, and accordingly in Armenia, will depend on economic data from FOREX market.
Of American news we should focus on manufacturing inflation index in June and the number of initial unemployment allowance applications from last week. The market members will also be interested in the U.S. Federal Reserve’s protocol publication. The last session of Operation Committee at the open market of Federal Reserve, the protocol of which will be published, disappointed the investors in reference to the stimulation measures of the largest global economies. That is why the protocol will hardly ever support the euro quotes.
Of European news we should highlight industrial production volume of the euro zone in May. This index is expected to report drop thus causing euro fall.
However, if the U.S. Federal Reserve protocol is satisfactory, and the data from the euro zone are better than forecasted, euro may rise. The expected euro fluctuation range at FOREX market will be 1.2150-1.2400 this week. The average selling rate of euro cash in Armenia this week may most likely be within 515 - 530 drams.
The average selling rate of the Russian ruble lost 1.61% reaching 12.80 drams last week due to decrease in the ruble’s value against USD touched off by slip in oil prices, lower than 100 dollars per barrel.
Ruble rates against USD and Armenian dram will depend on macroeconomic data from the United States, news from the euro zone, and oil prices dynamics. Publication of the U.S. Federal Reserve protocol will pressure Russian rubles quotes. However, if the European statistics is better than expected and oil quotes can restore their losses, ruble may jump.
As a result an average selling rate of the cash ruble in Armenia over the next five trading days is likely to be in the range of 12.65 – 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. E.O.-0-

YEREVAN, July 9. /ARKA/. Last week the cost of USD at NASDAQ OMX Armenia stock exchange rose by 0.09% to 419.00 drams as overall weekly trading amounted to $8.0 million, a 43.26% down over the previous week due to a short working week on the occasion of Constitution Day celebrations. The average selling rate of cash greenback climbed by 0.13% to 420.41 drams on July 7, Saturday.

We think that such USD dynamics is explained by decrease in USD supply and absence of the principal market actors as a result of many days-off.

This week dollar may continue rising if importers and the population go on acting with their demand for this currency. The main reason for such demand is a non-stable situation at the world financial markets.

The American dollar is still regarded by the Armenian currency market as a currency –asylum. We suppose that this tendency should have been touched off by the concerns around slowdown of the global economy and consequences for Armenian economy. The growing American currency at FOREX market also fosters advance of the USD against the Armenian dram.

Nevertheless, the USD may drop or consolidate if the market members demonstrate caution around the Central Bank’s intervention aimed at supporting the national currency against the further devaluation.

As a result, we think an average selling rate of USD cash will be within 418 – 423 drams this week.

The euro exchange rate in Armenia last week was determined by events at FOREX global currency market, where EUR/USD pair tumbled by 2.94% to 1.2289.

Throughout the last week the cost of euro was pressured. At the beginning of the last week euro quotes were slipping as investors were doubtful about the results coming from EU summit. Moreover, the disappointing economic data from the United States, euro zone and China didn’t bring any optimism either. Indeed, the processing industry activity of these states reported drop.

Euro continued falling as the European Central Bank decreased its key interest rate to 0.75%, and its rate on deposits- to 0% while making attempts to support lending and economy stimulation.

Published on Friday, July 6, economic data from the U.S. labor market were worse than projected thus inciting sales of the European currency.

Indeed, the indicator jumped by 80.0 thousand against the forecasted 100.0 thousand in June. According to the reviewed data the number of new jobs in May increased by 77,000 whereas it was earlier reported about 69,000. Even though the number of new jobs in June are more than that of the previous months, the rates of opening new jobs are still much lower from those in the beginning of the year.

As a result, the average selling rate of euro cash in Armenia last week shrank by 1.42% to 525.35 drams. We forecast that as euro dynamics in Armenia stays behind its dynamics at the global market because of time limit of the trading session, an average selling rate of euro cash in Armenia will, probably, drop to 520.0 drams on Monday, July 9.

This week the euro dynamics in the world, and accordingly in Armenia, will depend on economic data from FOREX market.

Of American news we should focus on manufacturing inflation index in June and the number of initial unemployment allowance applications from last week. The market members will also be interested in the U.S. Federal Reserve’s protocol publication. The last session of Operation Committee at the open market of Federal Reserve, the protocol of which will be published, disappointed the investors in reference to the stimulation measures of the largest global economies. That is why the protocol will hardly ever support the euro quotes.

Of European news we should highlight industrial production volume of the euro zone in May. This index is expected to report drop thus causing euro fall.

However, if the U.S. Federal Reserve protocol is satisfactory, and the data from the euro zone are better than forecasted, euro may rise. The expected euro fluctuation range at FOREX market will be 1.2150-1.2400 this week. The average selling rate of euro cash in Armenia this week may most likely be within 515 - 530 drams.

The average selling rate of the Russian ruble lost 1.61% reaching 12.80 drams last week due to decrease in the ruble’s value against USD touched off by slip in oil prices, lower than 100 dollars per barrel.

Ruble rates against USD and Armenian dram will depend on macroeconomic data from the United States, news from the euro zone, and oil prices dynamics. Publication of the U.S. Federal Reserve protocol will pressure Russian rubles quotes. However, if the European statistics is better than expected and oil quotes can restore their losses, ruble may jump.

As a result an average selling rate of the cash ruble in Armenia over the next five trading days is likely to be in the range of 12.65 – 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. E.O.-0-


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