The dollar opened slightly against the real this Friday (22), in an adjustment movement after a recent jump to close to the R$ 5.50 mark, but was still heading for its second consecutive week of gains.
At 9:04 am (GMT), the spot dollar retreated 0.22%, to R$ 5.4843 on sale.
On B3, at 9:04 am (GMT), the dollar futures contract with the first maturity fell 0.25%, to R$ 5.4960.
The day before, the dollar regained strength against the real and renewed its highest levels since January this year. Firmly up against the real throughout the session, the American currency closed business this Thursday (21) up 0.64%, at R$ 5.4970, the highest level since January 24 this year. (R$ 5.506).
The process of tightening monetary conditions in developed economies, added to local uncertainties regarding fiscal dynamics and the conduct of monetary policy from 2023 onwards, has put pressure on the US currency in the local market. This Thursday, the ECB (European Central Bank) raised the basic interest rate in the region by 0.50 percentage point, the first increase since 2011.
Since the year’s low reached in early April, when it touched R$4.61, the dollar has already marked an appreciation of approximately 19.2% against the real.
Correparti’s foreign exchange director, Jefferson Rugik says that, with the dollar approaching the level of R$ 5.50 against the real, he would not be surprised if the BC (Central Bank) comes to intervene in the market with the purchase of dollars, from in order to remove part of the upward pressure on the exchange rate, with the objective of avoiding a contagion to inflation.
US stocks rise on strong Tesla rally
​On the stock exchanges, after starting the last session in the negative field, shares reversed the downward trend in the early afternoon and started to rise, with investors taking advantage of papers considered excessively discounted.
The high interest rates in developed markets and the risk of a recession in the major global economies, however, remain on the radar of economic agents.
In the local market, the Ibovespa marked the fifth consecutive high in the last trading session, ending the day with an appreciation of 0.76%, at 99,033 points.
The local index was supported by the rise in Vale’s shares, which after falling 2.1% the day before, advanced 1.75% this Thursday. The financial sector, with a rise in the large banks — 1.35% in Bradesco’s shares, and 0.81% in Itaú — also contributed to the positive closing of the Stock Exchange​.
In the United States, the S&P 500 ended Thursday up 0.99%, while the Nasdaq advanced 1.36%, and the Dow Jones gained 0.51%.
The positive highlight in the US market was on account of Tesla shares, which jumped 9.8%, after the company had reported a net profit of US$ 2.26 billion in the second quarter, or US$ 1.95 per share, the day before. compared to $1.14 billion, or $1.02 per share, a year earlier.
In the European market, caution prevailed among the main markets. The FTSE-100, from London, closed practically stable, with a slight increase of 0.09%, and the DAX, from Frankfurt, retreated 0.27%. The CAC-40, from Paris, increased by 0.27%.
The ECB on Thursday raised Europe’s interest rate by 0.50 percentage point from -0.5% to zero, joining global peers in rising borrowing costs. It was the first rate hike by the eurozone central bank in 11 years.
Ending an eight-year experiment with negative interest rates, the ECB also raised its key refinancing rate to 0.50% and promised further increases possibly as early as its next meeting on 8 September. Experts estimate that the beginning of the monetary tightening process could bring some short-term relief to the euro.
The hike in interest rates by the Federal Reserve (Fed, central bank of the United States), and the risk of recession, however, should prevent a more expressive strengthening of the single currency of the European continent. On Thursday, the currency closed slightly down 0.09% at $1.0182.
With inflation already approaching double digits in Europe, there is a risk that it will take root above the ECB’s 2% target, and any shortage of gas during the winter should drive prices even higher.
Chief economist at Suno Research, Gustavo Sung, points to data from Eurostat, the European Union’s statistics agency, which indicate that consumer prices (CPI) for the Euro Zone rose to 8.6% in June in the 12-month period. A year ago inflation was at 1.9%.
“High inflation, the possibility of recession, the ECB’s own delay in raising interest rates, the effects of the war in Ukraine and problems with energy supply, are all factors that have increased uncertainty regarding the bloc,” says Sung.
“We believe that the monetary tightening by the ECB should continue this year with two more possible hikes. We emphasize, however, that the increases will be insufficient to contain inflation and improve the economic situation in Europe. To effectively get out of this situation, the continent should focus on incentives for investments, job creation and improved financial health in the public and private sector”, says Maria Levorin, manager of Multiplica Capital.
The specialist also says that, as a consequence of the ECB’s decision, she sees a negative scenario for the growth of economies, given the fears of recession that would lead countries to enter stagflation (a combination of low growth and high inflation).
with Reuters
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