04/07/2024 – 17:21
The dollar fell sharply in Brazil this Thursday, returning to below R$5.50, after President Luiz Inácio Lula da Silva interrupted, the day before, the recent series of attacks on the Central Bank and monetary policy, reinforcing, on the other hand, the government’s commitment to fiscal balance.
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The US dollar closed the day at R$5.4863 for sale, down 1.49%. In 2024, however, the currency is still up 13.08%. On Tuesday, before the government’s change of tone, the dollar was trading at R$5.70. See quotes
At 5:04 pm, on B3, the first-maturity dollar futures contract fell 1.21%, to R$5.5015 for sale.
And the Ibovespa closed above 126,000 points for the first time since May this Thursday, confirming the fourth consecutive increase, with signals from the federal government in favor of spending cuts pleasing financial agents in a trading session with reduced volume due to a holiday in the United States.
The Brazilian stock market’s benchmark index, the Ibovespa, rose 0.39% to 126,155.29 points, marking 126,659.95 points at its highest and 125,665.59 points at its lowest point in the session, according to preliminary data.
The financial volume totaled R$15.3 billion before the final adjustments, from a daily average of R$23.67 billion in 2024, weakened by the Independence Day holiday in the USA.
The dollar in the day
With markets closed in the United States for a holiday, liquidity was lower in Brazil this Thursday, with investors focused exclusively on Brasília.
In Wednesday’s session, Lula interrupted a recent sequence of almost daily criticisms of the president of the Central Bank, Roberto Campos Neto, the current level of the Selic rate and the financial market, preferring to defend the adjustment of public accounts.
At night, with the markets already closed, it was the turn of the Finance Minister, Fernando Haddad, after a meeting with Lula, to state that the president had ordered compliance with the fiscal framework and that the economic team had already identified 25.9 billion reais in mandatory expenses to be cut in the 2025 Budget.
On Thursday, Lula returned to participate in two public events in the interior of São Paulo, but as on the previous day, he did not criticize the Central Bank or monetary policy. In this scenario, the dollar suffered strong losses against the real, returning to below 5.50 reais.
“(There was) a very clear change in the tone that had been used (by the government) on Monday and Tuesday. So, the market completely disarmed yesterday, with the stock market rising, the interest rate curve giving way significantly and the real appreciating significantly,” Paulo Gala, chief economist at Banco Master, said in a comment sent to clients this morning. “Today the movement continues.”
After reaching a high of 5.5097 reais (-1.07%) at 9:02 am, shortly after opening, the spot dollar registered a low of 5.4668 reais (-1.84%) at 9:58 am.
“Naturally, the domestic situation has improved. If tomorrow’s (Friday) payroll and the CPI increase the Fed’s interest rate cut bet, we could see the real continue to appreciate,” said the director of consultancy Wagner Investimentos, José Faria Júnior, referring to the upcoming important economic releases in the United States.
On Thursday, with the US market closed, liquidity abroad was also reduced. At 5:10 p.m., the dollar index — which measures the performance of the US currency against a basket of six currencies — fell 0.16% to 105.130.
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