YEREVAN, August 20. /ARKA/. Last week, the exchange rate of U.S. dollar at NASDAQ OMX Armenia stock exchange dropped by 0.10% to 411.50 drams with weekly trading in the greenback amounting to USD 13.90 million, up 13.93% from the previous week. The average selling rate of cash dollar fell by 0.30% to 412.71 drams on Saturday amid reports about decrease in global business activity due to summer holidays, as well as a decrease in the U.S. dollar cost at forex markets.
Against the backdrop of anticipated drop in the value of U.S. currency at foreign exchange markets, and new stimulus measures, the U.S. dollar has all reasons to continue the decline to 410.0 drams. However, we do not consider this movement as the end of the upward trend of the U.S. currency because of the ongoing high demand for it by the businesses and the public at large.
Indeed, according to the Central Bank of Armenia, the amount of net foreign currency sales at the intra-exchange market last week amounted to USD 17.961 million, which was almost two times more than the previous week. The average selling rate of cash dollar in the coming week is likely to be within 410.0 – 414.0 drams.
In the first half of last week the European single currency fell in value amid weak macroeconomic data from the euro zone. Indeed, eurozone GDP decline in the second quarter accelerated on an annualized basis from 0.1% to 0.4%. The index of business activity in Germany by ZEW Institute in August fell to 25.5 from 17.5. Data on industrial production in the euro zone did not either add optimism.
However at the end of the trading week the euro managed to bounce back after German Chancellor Angela Merkel said during a visit to Canada that Berlin will support the efforts of the European regulator to stabilize the eurozone. This week the euro rate will be determined by economic news from the U.S. and the eurozone. The average selling rate of euro cash in Armenia will probably be 505 – 517 drams.
The average selling rate of the cash Russian ruble in the previous week declined by 0.15% to 3.13 drams, due to the depreciation of the Russian ruble against the U.S. dollar at the end of the week amid falling oil prices and the rise in Armenian dram’s value . The cost of ruble against the U.S. dollar and the dram this week will depend on the macroeconomic data from the U.S. and the euro area, as well as on the dynamics of oil prices. The average selling rate of cash ruble in Armenia this week is likely to be in the range of 12.85 – 13.15 drams.
Mikael Verdyan, analyst at GK Forex Club
The opinion expressed by the author may not necessarily represent that of the agency.
