EghtesadOnline: Amid the upbeat in the Tehran stock market, gold and currency closed the week bullish despite decline in international gold prices.
The US dollar briefly climbed above the resistance level of 145,000 on Thursday, up 1.5% compared to a day earlier. The euro traded for 162,000 rials and the UK pound fetched 187,000 rials.
The gold market, which took influence from both the local and global currency market, soared on Thursday spurred by stoking forex rates and indifferent to the fall in the global value of the yellow metal.
Gold coin climbed to over 50 million rials ($357) on Wednesday to break the resistance channel for a second time in the week. Each Imami gold coin changed hands for 50,200,000 rials, up 600,000 rials compared to a day earlier, Financial Tribune reported.
According to Reuters, gold prices on Friday hovered near the four-month low in the previous session, after the US Federal Reserve dampened expectations of a rate cut in the near term, boosting the dollar and setting the bullion on course for a weekly drop.
According to the Persian-language newspaper Donya-e- Eqtesad, the forex rally was triggered by higher rates for transferring the UAE dirham via hawala and ending of the US sanctions waivers on Iranian oil importers that came into effect on May 1.
The United States announced in mid-April that it will terminate the exemptions granted to Iranian oil buyers and demanded buyers of Iranian oil stop purchases by May 1 or face sanctions.
Role of Dirham
Market analysts ascribe the surge in the dirham rate to the disruption in supplying the currency on the part of UAE in the beginning of the trading week.
Dubai due to its traditionally strong trade ties with Iran, in the past acted as hub for Iran’s currency transactions. Rise in dirham rates usually pushes up other major currencies in Iran.
Observers say surges in currency rates are affected by the bullish trends in other parallel markets. Therefore, when prices jump in the auto and housing market, the same is extended to the highly volatile currency market.
Central Bank of Iran data shows that the average price of one square meter of a residential unit in Tehran surged 104% a year-on-year basis. In the same vein, car prices have been rising almost on a daily basis over the past several months.
Bullish currency rates tend to stimulate the stock market where export-based firms have a strong presence. The main index of the Tehran Stock Exchange, TEDPIX, beat trade records in several sessions to finish the trading week at an unprecedented 220,109 points.
TEDPIX has gained 41,450 points since the beginning of the current fiscal (started March 21) to register 23.2% growth compared to the last trading day of the previous fiscal when the benchmark was 178,659 points.
During the same period, the main index of Iran Fara Bourse, the junior stock market, registered 17% return to stand at 2,643 points on the final trading day Wednesday.