June 12, 2024

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Dollar Shows Biggest Monthly Rise Since 2020: What Does It Mean?

Dollar Shows Biggest Monthly Rise Since 2020: What Does It Mean?

In June, the dollar reached its highest level in two years. Understand the reasons behind this appreciation.

Estimated reading time: 3 Minutes

In the face of the turbulent economic scenario and fear of a global recession, the dollar showed the highest monthly increase in two years and the stock market experienced its worst decline in two months. Last Thursday (30), the US currency rose 0.81%.

By the end of June, the dollar reached a 10.03% increase mark, the highest monthly increase since March 2020, in the midst of the pandemic, when it presented a 15.92% rise.

Ibovespa down

Regarding the stock market, the mood is also tense. Ibovespa of B3 closed at 98,542 points, down 1.08%. In a one-month period, the index fell 11.5%, the worst monthly performance since 2020. In this quarter, the stock market showed a loss of 17.88%, the highest in two years.

The reasons behind this reality are both internal and external. US stocks also fell sharply last week, and indexes were the worst since 1970.

The instability of the international market is justified by the possible recession in North America, after the Federal Reserve (Fed, Central Bank) raised key interest rates at the beginning of the month. The highest inflation rate Economie the highest level on the planet since 1981.

In Brazil, investors are concerned about the federal government’s new proposals to increase the values ​​of Auxílio-Brasil and Vale-Gás, as well as create new benefits for truck drivers and taxi drivers.

Factors that lead to an increase in the value of the dollar

There are a number of factors that influence the appreciation of the US currency. Check out the most important ones.

  • High demand: occurs when Banks Central hubs, financial institutions and even investors need more dollars.
  • Exports and imports of raw materials and inputs: Large imports of products lead to deficits and an appreciation of the dollar.
  • Interest rate increase by the Federal Reserve: Investors become interested in the bonds offered by the government, which increases international demand.

What is ibovespa?

Ibovespa acts as a performance indicator for the stocks executed on B3, in which the stock market transactions in the country take place. It is calculated by averaging the most traded stocks on the stock exchange every 4 months.

When the indicator shows a certain increase, it means that companies have risen and investors are more optimistic. On the contrary, when it appears bearish, it means that the market is more cautious due to some event that directly affects the financial scenario.

With 50 years of history, Ibovespa is a reference for investments all over the world.

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