Armenia: Forex Market review for April 29 – May 3

06.05.2013 15:36
Armenia: Forex Market review for April 29 – May 3

YEREVAN, May 6. /ARKA/. Last week, the average exchange rate of the U.S. dollar at NASDAQ OMX Armenia stock exchange rose by 1.57% to 415.98 drams with weekly trading totaling $ 6.70 million, which was 56.04% less than the previous week. The average exchange rate of the greenback rose further by 1.28% on Saturday, April 4, to 417.24 drams. The rapid rise was primarily due to the continuing demand of businesses and individuals for foreign currency as well as moderate devaluation sentiments in the market. The relatively strong standing of the U.S. currency at international currency markets was another factor enhancing the attractiveness of this asset.

This week the U.S. dollar has every reason to continue the rise up to 420.0 drams. However, towards the end of the week, the Armenian currency is likely to again recover a little. The rise of the USD may be backed also by the intervention of the Central Bank in the foreign exchange market.

The rise in greenback’s value will be also backed by the ongoing demand for it by individuals and businesses. According to the Central Bank of Armenia, net sales of foreign exchange by commercial banks last week amounted to $12,369 million, up from $616,000 the previous week. According to our estimates, the average selling rate of cash dollar this week is likely to be between 415.0 - 421.0 drams.

The cost of the single European currency last week was defined by developments at the global currency markets, where the EUR/USD rose by 0.64% to 1.3112, and the dynamics of the dram as opposed to the U.S. currency. After a bumpy start of trading in the beginning of last week the single European currency suffered heavy losses following the announcement of the outcome of the ECB meeting. The European regulator, as expected, cut interest rates by 25 basis points to 0.50% in a move to give an additional stimulus to economy.

However, at the end of the week the pair managed to rise after the release of more positive than expected labor market data from the U.S. Against the background of these developments, as well as due to the decrease in the Armenian dram against the U.S. dollar the average selling rate of cash euro rose by 1.95% to 548.58 drams.

The average selling rate of the Russian ruble last week rose by 1.96% to 13.54 drams due to the rising cost of the Russian ruble against the U.S. dollar at international currency markets and a decrease in the Armenian currency’s’ value.

By Mikael Verdyan, FOREX CLUB analyst, specially for ARKA
Views of the author may not necessarily represent those of the agency

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