YEREVAN, February 25. / ARKA /. The average exchange rate of U.S. dollar at NASDAQ OMX Armenia stock exchange last week rose 0.48% to 408.96 drams with weekly trading amounting to $4 million, which was 75.03% less than the previous week.

The average selling rate of USD rose by 0.64% on Saturday to 410.59 drams. The situation at Armenia’s currency market depends largely on the demand for foreign currency on part of importers and individuals, on the rise in greenback’s value at international currency markets as well as on moderate devaluation sentiments in the market.

This week the U.S. dollar is likely to be trading at 410.0 drams. However, towards the end of the week, the Armenian currency may be recover somewhat. The Central Bank of Armenia may contribute to this trend by intervening in the foreign exchange market.

The increased purchase of the greenback by population and businesses will also contribute to the growing value of the U.S. currency. According to the Central Bank of Armenia, net sales of foreign currency by banks last week amounted to $6.961 million, which was nine times higher than the previous week. According to our estimates, the average selling rate of cash dollar in Armenia this week is likely to be within 408.0 - 413.0 drams.

The cost of the single European currency last week in Armenia was determined by developments at international currency markets, where EUR/USD fell by 1.29% to 1.3186, as well as by the dynamics of the dram against U.S. dollar.

In the middle of the week, the situation changed after the publication of the minutes of the last meeting of the U.S. Federal Reserve, but not in favor of the euro. According to them, at the January meeting some leaders of the American regulator expressed concern about loose monetary policy, which prompted investors to give their preference of the American currency. In addition, the European Commission’s forecast, which indicates a decrease of eurozone GDP by 0.3% in 2013 for the second year in a row, did not add optimism either.

At the end of the week, the cost of the single European currency continued to remain under pressure on the wave of news on ECB loans, which indicate that the amount of payments by commercial banks on three-year loans will be less than expected. Against this background, the average selling rate of cash euro in Armenia last week fell by 0.64% to 543.62 drams.

This week the euro dynamics in the world and consequently in Armenia will be determined by economic news from the U.S. and the eurozone. Of U.S. news it is worth paying attention to the revised GDP data for the fourth quarter, as well as to the figures from the housing market, the data on consumer confidence and Chicago PMI activity for February. Of European news we would like to highlight the publication of data on the consumer price index and the PMI for the manufacturing sector in February. Most of these statistics is expected to be moderately positive. Another factor that could affect the value of the euro and determine its dynamics this week will be the report of Fed Chairman Ben Bernanke slated for February 26 on monetary policy to Congress. The euro volatility range this week is 1.3000 - 1.3300. This in view the average selling rate of euro in Armenia this week will probably be within 535 - 553 drams.

The average selling rate of the Russian ruble last week declined by 0.51% to 13.59 drams due to a decrease in value of the Russian ruble against the U.S. dollar amid continuing problems in the European economy and uncertainty about further quantitative easing measures the U.S. Federal Reserve.

The value of the ruble against the U.S. dollar and, therefore, the dram this week will depend on the macroeconomic data from the U.S., as well as the dynamics of oil prices. The U.S. Federal Reserve Chairman Ben Bernanke’s report and relatively high oil prices will support the quotes of the ruble this week. This in view the average selling rate of cash ruble in Armenia this week is likely to be in the range of 13.52 - 13.67 drams.

Mikael Verdyan, FOREX CLUB expert, specially for ARKA
Views of the author do not necessarily represent those of the agency