The dollar started Monday (11) with strong gains against the Brazilian currency, going above R$ 5.30 as new cases of Covid-19 in China and the threat of an energy crisis in Europe fueled fears of a global recession, with growing domestic political and fiscal tensions exacerbating the risk aversion climate.
At 9:07 am (GMT), the spot dollar advanced 0.62%, at R$ 5.3018 on sale.
On B3, at 9:07 am (GMT), the dollar futures contract of the first month rose 0.79%, to R$ 5.3320.
At the close of the domestic exchange market on Friday (8), the commercial dollar accumulated a weekly drop of 1.01% against the real. The expectation of increased exports of commodities to China was an important factor in the result.
Beijing announced on Thursday (7) a package of US$ 220 billion (R$ 1.16 trillion) in infrastructure investments in the country, according to the Bloomberg agency.
The Brazilian Stock Exchange followed the volatility of global markets. The Ibovespa index ended the week up 1.35%.
In the United States, the S&P 500, a benchmark for the New York Stock Exchange, added a weekly increase of 1.94%.
Data on the strong generation of jobs in the United States focused attention. The country opened 372,000 jobs in the urban sector in June, well above the expectation of 268,000 jobs, according to an estimate by Reuters.
Despite the attention focused abroad, the political news also caused fluctuations in the market due to the vote on the PEC (proposed amendment to the Constitution) that allows the government of President Jair Bolsonaro (PL) to break the spending ceiling and circumvent electoral legislation to open public coffers less than three months before the elections.
The fiscal risk borne by the PEC helped push up short-term DI (Interbank Deposits) interest curves, revealing the market’s bet that the Central Bank will keep the Selic at high levels for longer to face inflation.
Just last Friday, the euro fell to its lowest daily rate against the dollar in 20 years. The common currency among European countries closed the day at US$ 1.0185, very close to parity with the American currency.
In the Brazilian exchange, the spot euro fell 1.30% against the real in this trading session and closed the day at R$ 5.3615. The quotation was very close to the dollar (R$ 5.2680).
The European currency’s tumble is yet another sign of fears of a global recession. The European Central Bank is also dealing with the need to raise interest rates to reduce inflation and, like the Fed, needs to find the right point of tightening to stop the rise in prices without destroying the economy.
with Reuters
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