June 3, 2023

The Catholic Transcript

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The dollar rose to 5.423 Brazilian Real, the highest value since 5/5;  Ibovespa is also high

The dollar rose to 5.423 Brazilian Real, the highest value since 5/5; Ibovespa is also high

With the market looking forward to interest rates in the United States, the dollar today reached its highest level for the second time in a row, by 0.89%, and ended the day offered for sale at 5.423 Brazilian reals. It is the highest closing value reached in more than three months, since May 4, when the US currency reached 5,431 Brazilian Real at the end of the session.

NS IbovespaIn turn, it cut a series of three consecutive declines by more than 1% and ended Thursday (19) with a rise of 0.45%, to 117,164.69 points. The day before, the main index of the Brazilian Stock Exchange (b 3) to 116 thousand points, At its lowest level in more than four months.

With the new rally, the dollar has now accumulated a gain of 4.09% in August against the riyal. The Ibovespa index remained in the red, down 3.81% on the month.

The dollar value that newspapers publish daily, including UOL, back to dollar trading. For those who travel and need to buy coins from exchange brokers, the value is much higher.

Interest in the USA

The new rise in the dollar represents a reaction by investors to the possibility raised by the Federal Reserve (Federal Reserve, the US central bank) to reduce stimulus to the US economy in 2021, in addition to the political and financial uncertainty that still exists in Brazil.

Most of the Fed’s rate-setting committee, now near zero, is uniting around a plan that will see the monetary authority begin cutting its bond-buying program later this year, The second showed the minutes of its last meeting.

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Although the document attempted to separate the end of purchases from the need to raise interest rates, “the market still has to see that the earlier the announcement occurs, the more likely an interest rate increase will be at the end of 2022,” the macro research team explained in the report. Actual BTG.

The only thing that is clearer now than it was before the release of the minutes is that the “hard-core” audience [mais austera, que defende juros mais altos para controlar a inflação] Who publicly called for a “quick and fast” cut does not represent the majority opinion.
Thomas Simmons and Anita Markowska, from Jefferies, in the note

Optimism with Brazil “more”

“The optimism in the financial market is over,” Vinicius Martins, director of Fi Investments, told Reuters in Brazil.

the price [do dólar] What we are seeing is in line with the market moment and there are no major signs of improvement. This is because easing will depend on several factors that are difficult to resolve in the short term: the domestic fiscal issue, especially as elections approach, and the Fed’s tightening position abroad.
Vinicius Martins, from Phi Investimentos

The Brazilian government’s efforts to change the payment of court orders and increase spending on aid to the population have cast doubt on investors about Brazil’s ability to honor the fiscal ceiling, with delays in the vote on the bill that would change tax collection (Income taxContribute to risk aversion and fluctuations in local markets.

In response to a question whether the central bank can intervene more forcefully in the exchange market due to the appreciation of the dollar, Martins said that “BC will only intervene if the movement of the dollar is very specific and there is a detachment of Brazil with respect to other similar economies.” This is not the case now, as the northern currency is gaining strength all over the world.

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(with Reuters)