06/21/2024 – 17:54
After five consecutive sessions of increases, the dollar fell in the session this Friday, 21st. According to operators, the decline of the North American currency in relation to Latin American currencies, especially the Mexican peso, opened space for adjustments and realization of profits in the local market. There were also reports of internalization of resources by exporters to take advantage of the rise in prices in recent days.
With a minimum of R$5.4238 and a maximum of R$5.4625, the spot dollar ended the session down 0.39%, quoted at R$5.4408.
The currency ends the week with a gain of 1.09%, which takes the accumulated increase in June to 3.62%. For the year, gains of 12.10%. On Thursday, the dollar closed at its highest value since July 22, 2022.
The real presented the worst performance among emerging currencies, especially in comparison with Latin American peers, this week. In the year, taking into account the main global currencies, emerging and developed, the dollar boasts the biggest gains in relation to the yen and the real.
Analysts say that increased skepticism about meeting fiscal targets and distrust in the management of monetary policy continue to support investor demand for currency hedging. The unanimous decision of the Monetary Policy Committee (Copom) to maintain the Selic rate at 10.50% did not dispel fears of a more lenient Central Bank with inflation from 2025 onwards.
The chief economist at Armor Capital, Andrea Damico, states that the real was affected this week by the government’s speeches questioning the autonomy of the Central Bank, despite the Copom’s attempt to “gain credibility in the short term” with the consensus among directors around maintaining interest rates.
“Although the Copom kept the interest rate unchanged and unanimously, the market still observes political decisions with caution and takes risk-averse positions”, says Damico, adding that the government, despite starting discussions on cutting spending , did not bring a “specific and clear decision” on the topic. “This scenario, combined with a negative flow, meant that for another week the real had a worse performance compared to its peers.”
Investors’ sensitivity to political noise is great. This Friday, the dollar came to zero losses on time at around 3:45 pm amid critical statements by President Luiz Inácio Lula da Silva to the president of the Central Bank, Roberto Campos Neto, and the current management of monetary policy. In an interview with Mirante News radio, in Maranhão, Lula said that Campos Neto is his “political and ideological opponent”, in addition to not being “concerned” with the governance adopted by the government.
“We are approaching the time to change the president of the Central Bank. I think things will return to normal, because Brazil is a very reliable country”, said Lula, who on Thursday had already criticized the decision of the Copom and Campos Neto, whose mandate ends at the end of this year. Lula also said that the appreciation of the dollar does not worry the government.
For Monte Bravo’s chief economist, Luciano Costa, doubts about the fiscal framework continue to be the main driver of the dollar’s rise. He recalls that, on Thursday, in addition to the attacks on monetary policy, Lula stated that it is not on the government’s agenda to establish new limits for spending on health and education or to deindex social security benefits from the policy of increasing the minimum wage.
“This brings a lot of uncertainty. Without the announcement of measures, the tendency is for the exchange rate to remain under pressure over the next few weeks”, says Costa, for whom the favorable impact of the Copom decision on Wednesday, 19, was nullified by Lula’s speeches.
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