Parity between euro and dollar, PEC of R$ 41 billion advances in the Chamber and what matters in the market

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Is it time to buy euros?

For the first time in 20 years, the euro devalued to the point of being worth one dollar, a level recorded this Tuesday (12).

What explains? It is a sum of the appreciation of the dollar around the world, economic impacts of the war in Ukraine, escalation of inflation with the price of energy and a less aggressive policy of high interest rates by the ECB (European Central Bank).

Is it time to buy euro to travel? Despite the fall in the price against the dollar, the common currency was already more affordable here. The recommendation for those who have a trip scheduled is to opt for the average price, with purchases little by little and at regular intervals.

• For those who will travel in the coming weeks and especially for those who want to convert the dollar into the euro, the moment is considered more positive, say analysts.

What are the impacts in Europe?

• Pressure on commodity prices: items such as oil and natural gas –relevant energy sources for Europe– are quoted in dollars and should continue to put pressure on inflation.

• Most competitive exports: products from eurozone countries are cheaper for those who buy from abroad, which may at least partially alleviate the projected recession.

• Increase in interest: with expectations of persistent inflation, the ECB should accelerate monetary tightening, making credit more expensive and weakening economic activity.

Benefits PEC is approved in the 1st round

The Chamber of Deputies approved this Tuesday (12), in the first round, the basic text of the PEC that authorizes the government to expand benefits in an election year, at a cost of BRL 41.25 billion.

The proposal was approved by 393 to 14 – 308 votes in favor were needed.

The president of the Chamber, Arthur Lira (PP-AL), decided to suspend the voting of the highlights and the 2nd round due to technical problems.

Understand: as the law prevents the creation of benefits in an election year, the text institutes a state of emergency, one of the exceptions provided for in the legislation and which also allows the government to break the spending ceiling to increase expenses.

The second round vote could still change the text, as the opposition tries to remove the state of emergency from the proposal.

The measures planned to be in effect until the end of the year:

• Expansion of Aid Brazil from BRL 400 to BRL 600 from August. estimated cost of BRL 26 billion. The queue for the benefit will also be zeroed.

• monthly voucher in BRL 1,000 for self-employed truck drivers from July. estimated cost of BRL 5.4 billion.

• Folded gas assistanceat a cost of BRL 1.05 billion.

• Also has BRL 2 billion to taxi drivers, BRL 500 million for a program that finances the donation of food to low-income families and BRL 2.5 billion for states and municipalities to subsidize public transport.

Argument Duel:

• In favor: government deputies claim that the PEC is necessary to deal with the increase in prices caused by the war in Ukraine and to help more than 30 million vulnerable Brazilians.

• Against: despite not having voted against the proposal, opposition parliamentarians call the PEC an electoral campaign for increasing benefits only until the end of the year, in addition to accusing it of violating electoral legislation.

Impact on the Stock Market: since the approval of the PEC entered the market’s radar, the shares of retail companies reacted higher.

• The expectation of an increase in consumption with the expansion of benefits may increase the sales of companies, whose shares have plummeted in recent months affected by inflation and interest.

BC sees risk of laundering in Binance operations

The Central Bank notified the bank Acesso, which was responsible in Brazil for the transactions of the Binance brokerage, about the high risk of money laundering in the operations of the exchange and demanded the submission of detailed information about the clients.

The action generated an exchange of accusations between Binance and Capitual, the company’s financial arm with Acesso, which culminated in the freezing of BRL 450 million in Capitual’s assets and in the exchange of operator of Binance, which now uses Latam’s services. gateway.

Understand the case: Crypto exchanges need a financial agent (regulated by the BC) that bridges the gap between the transactions made on the platform and the money that enters the clients’ individual bank account.

• The problem, according to BC, was that Binance moved BRL 40 billion in 2021 without Access having any control over who the customers were and whether the origin of the funds was lawful.

• The BC determined in May that Acesso would be able to identify each Binance customer.

• Capitual then demanded that the exchange would need to migrate to a system where each client had an individual account, instead of all transactions being recorded in a single Binance account.

Reaction: the exchange that concentrates 52% of crypto operations in the country saw in the movement a way for Acesso and Capitual to have access to its customer base, something it did not want, and so it looked for a new partner.

• The company considers that at no time was it requested by the BC to individualize accounts and states that it has robust tools and processes to ensure the security of operations for all users.

99 partners with leader in electrics

The app transport company 99 has agreed a partnership with the Chinese BYD, the world’s leader in the sale of electric cars, to encourage the adoption of this type of vehicle in its fleet in Brazil.

The idea: according to the companies, a model specifically developed for use by app drivers will be tested starting this week in the city of São Paulo. The plan is to have 300 units running on the streets by the end of the year.

• The D1 has a range of 370 kilometers and increased passenger space. Fuel cost savings for drivers are 80%, including maintenance, 99 said.

Asian model: the project seeks to replicate what is already happening in China, where Didi, which controls 99 in Brazil, has more than 1 million of electric and hybrid vehicles registered on its platform.

• In order to reach the goal of adding 10,000 electric models to its app by 2025, 99 does not intend to buy the cars, but to facilitate the conditions for the driver to be able to rent these vehicles from rental companies.

• The D1, which will be tested in São Paulo, has an estimated cost of BRL 270 thousandsaid BYD.