The dollar started the week with strong gains, operating comfortably above the R$ 5.30 mark on Monday (26) marked by risk aversion abroad, while in Brazil, the final stretch of the electoral race contributed to caution of investors.
At 9:04 am (Brasília time), the spot dollar advanced 1.38%, at R$ 5.3208 on sale.
On B3, at 9:04 am (GMT), the dollar futures contract with the first maturity rose 1.08%, to R$ 5.3255.
In the early hours of Monday in Asia, the pound sterling fell 4.7% against the dollar, the lowest level in history, in reaction to the biggest tax cut package in 50 years, announced by the new UK finance minister, Kwasi Kwarteng. .
On Friday (23), the dollar soared against the real, following strong risk aversion in international financial markets as the prospect of rising interest rates in major economies fuels fears of recession. The pessimism caused a general fall in the stock markets and oil fell to its lowest price since January.
In the Brazilian exchange, the commercial dollar in sight advanced 2.64%, to R$ 5.2480 in the sale. Despite the downside this Friday, the real still accumulates around 6% gains over the dollar in 2022.
In comparison with the main world currencies, the American jumped 1.5%. That increased the US currency’s advantage over this basket of currencies to 18% this year.
The strength of the dollar also led the euro to renew its lowest daily rate against the US currency in 20 years. The European common currency ended the day at $0.9695.
Day after day the euro has been falling and, since the beginning of the year, it has lost more than 14% of its value against the dollar.
In the domestic exchange market, the commercial euro rose 1.11% against the real this Friday, quoted at R$5.0875.
On the Brazilian Stock Exchange, the Ibovespa index plunged 2.06%, to 111,716 points. The local market followed the falls of the main stock exchanges. The New York index fell 1.72%, considering the variation of the benchmark S&P 500.
An important part of the fall in the Brazilian stock market can be attributed to the 6.26% drop in shares in Petrobras, one of the companies with the greatest weight in the composition of the Ibovespa.
The state-owned oil company was harmed by the sharp devaluation of the raw material it produces. The price of Brent oil, the benchmark for this market, sank 4.67%. The price of US$ 86.23 (R$ 450.56) per barrel is the lowest since January this year.
Unlike what happened on the main exchanges this week, however, the domestic stock market had a weekly high of approximately 2.23%. New York accumulated a drop of 4.65% in five days. The index that tracks Europe’s 50 largest companies tumbled 4.42. Hong Kong lost 4.34%.
Analysts attribute the resistance of the Ibovespa and the real to investors’ perception that Brazilian monetary policy is succeeding in controlling inflation, although the fiscal risk caused by the increase in public spending by the federal government on the eve of the election remains on the market’s radar.
Last week, the Central Bank of Brazil confirmed the end of the cycle of raising the basic interest rate, although the country is still far from reaching its inflation targets. The BC maintained the level of 13.75% per year for the Selic.
In the United States, however, the Fed (Federal Reserve, the American central bank) confirmed the third sharp rise in a row of 0.75 percentage point in the cost of credit, without showing signs that the battle against inflation is nearing an end.
This context also explains the fall in the exchange rate in Brazil, while the dollar gained strength against the main currencies.
with Reuters
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