05/03/2024 – 17:48
The spot dollar closed Friday, 3rd, at a firm low in Brazil, returning to below R$ 5.10, in line with abroad, after weaker than expected data from the North American labor market raised prices. bets on interest rate cuts in the USA.
The US currency in cash closed the day at R$5.0693 on sale, down 0.86%. This is the lowest closing price in almost a month, since April 9, when the currency closed at R$5.0067. In the accumulated result for the week, the US currency fell 0.93%. See the dollar exchange rate today.
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Meanwhile, the Brazilian stock market reference index, Ibovespa rose 1.08%, to 128,496.08 points, accumulating a gain of 1.56% in the week, according to preliminary data. At the day’s high, it reached 128,786.96 points. At the minimum, at 127,130.46 points.
Scenario
The day before, the dollar had already fallen 1.53%, after the agency Moody’s improved the outlook for Brazil’s credit rating and after the decision on interest rates by the Federal Open Market Committee (Fomc), of the Federal Reserve. .
The downward movement continued this Friday with the release of worse than expected economic data in the United States.
The US Department of Labor reported at 9:30 am (Brasília time) that 175,000 jobs were created outside the agricultural sector in April, well below the 243,000 jobs the median expectations of economists polled by Reuters. Estimates ranged from 150,000 to 280,000 vacancies.
Then the Institute for Supply Management (ISM) reported at 11 a.m. that its non-manufacturing PMI fell to 49.4 last month in the US from 51.4 in March, the lowest reading since December 2022 .A reading below 50 indicates contraction in the services sector, which accounts for more than two-thirds of the US economy.
The two numbers — payroll and ISM — put downward pressure on dollar prices in Brazil, amid the reading that, with a less heated economy, there is greater room for interest cuts in the US this year, which in theory is unfavorable to the North American currency.
Treasury yields and DI rates (Interbank Deposits) also fell.
In this scenario, after reaching a maximum price of 5.1163 reais (+0.05%) at 9:03 am, shortly after opening, the spot dollar reached a minimum of 5.0448 reais (-1.34%) at 9:39 am, shortly after payroll.
“Disappointment with the numbers (of employment in the US) contributed to the devaluation of the dollar, which reached 5.05 reais, the lower limit of the estimated fluctuation range (between 5.05 and 5.15 reais)”, he highlighted. André Galhardo, economic consultant at Remessa Online, in comments to customers.
The movement was in line with the fall of the US currency against most other currencies abroad. This late afternoon the dollar had a firm drop against currencies such as the Chilean peso, the Australian dollar and the euro.
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