YEREVAN, October 8. / ARKA /. Last week the average weighted exchange rate of one U.S. dollar at NASDAQ OMX Armenia stock exchange fell by 0.54% to 405.25 drams with weekly trading amounting to $11.09 million, which was 36.26% down from the previous week. The average selling rate of a cash greenback fell by 0.19% to 407.82 drams on October 6. At the beginning of last week the greenback began showing strong growth on the back of the ongoing high demand for foreign currency by importers and population; however at the end of the week the dram managed to restore its lost position, possibly due to the intervention of the Central Bank, made to support the national currency.
This week the U.S. currency is likely to be consolidating. Some pressure on the U.S. dollar may come from the positive results of the Eurogroup meeting as well as from the declining purchase of U.S. dollars by population and businesses. Indeed, according to the Central Bank, sales of foreign currency by commercial banks last week amounted to $12.664 million, which was 7.38% less than in the previous week.
However, the demand for foreign currency in the market is still high so there are grounds for it to remain stable throughout this week. This in mind we expect the average selling rate of cash dollar in Armenia to be between 405.0 – 410.0 drams.
The cost of euro in Armenia last week was defined by trading at Forex markets, where EUR / USD rose 1.38% to 1.3035. The most significant growth of the single European currency was on Thursday, October after a press conference of Mario Draghi, head of ECB. Draghi reiterated the gloomy outlook for the economy and assured that the central bank is prepared to buy bonds of eurozone countries in difficulty.
This week the dynamics of euro in the world and, consequently, in Armenia, will be determined by economic news from the U.S. (non-food goods prices index for September, the Beige Book, as well as figures on the number of applications for unemployment benefits last week) and from eurozone (release of the final data on consumer price inflation in Germany in September, industrial production in the euro area in August, and the ECB’s Monthly Bulletin).
If, however, contrary to the forecasts, the statistics from the U.S. appears to be negative, and the news from the eurozone is better than expected, the single currency may rise. Moreover, we believe that investors will continue to wait for clarification of the situation around the unrelenting euro zone debt crisis, in particular the development of the situation in Spain. Any certainty in this matter may support euro cost in the short term. This in view we expect the average selling rate of euro cash in Armenia this week to be within the 525 – 540 drams.
The average selling rate of cash Russian ruble in Armenia last week rose by 1.76% to 13.33 drams, largely due to a higher cost of the Russian ruble against the U.S. dollar amid stable oil prices. The cost of the ruble against the U.S. dollar and, therefore, the dram this week will depend on the macroeconomic data from the U.S. and the euro area, as well as the dynamics of oil prices. This in view we expect the average selling rate of cash ruble in Armenia this week to be within 13.25 – 13.40 drams.
By Mikael Verdian, an analyst for FOREX CLUB; written specially for ARKA
The opinion of the author may not necessarily represent the opinion of the news agency.
