By Luana Maria Benedito
SAO PAULO (Reuters) – The dollar began the week -which should have reduced liquidity due to the approach of the holiday season- in high against the real, as investors around the world sought assets considered safe this Monday in amid fears that the Ômicron variant of the coronavirus will prompt large economies to adopt tougher measures to combat Covid-19.
At 9:55 (from Brasília), the dollar in cash advanced 0.42%, to 5.7084 reais on sale.
On B3, at 9:55 (Eastern), the dollar futures contract with the first maturity rose 0.11%, to 5.7195 reais.
“Global markets are opening the week in a tone of ‘risk-off’ (risk aversion), with investors eyeing the worsening of the global health picture,” said Victor Beyruti, economist at Guide Investimentos. “Risk assets should not escape contagion due to the general worsening sentiment that characterizes international markets.”
After the Netherlands decreed a lockdown on Sunday — possibly pressuring other European economies to adopt similar measures to curb the spread of the ‘micron strain’, European stocks and Wall Street futures fell sharply on Monday. [.EUPT][.NPT]
In currency markets, the dollar index against a basket of six rivals was down 0.13% but was close to a high since the middle of last year. The Australian currency, seen as an indicator of global risk appetite, was losing 0.2% this morning.
In addition to fears associated with the pandemic, economists at Bradesco drew attention to “reduced liquidity (in international markets) due to the end-of-year festivities”. Deals will be cut short this week by Christmas Eve, which falls on Friday.
In a report released on Monday, the bank’s specialists also said that the focus of market participants will fall on economic indicators both in Brazil –with the release of the IPCA-15 in December on Thursday– and in the United States, which it publishes during the week readings on the Gross Domestic Product (GDP) and the PCE price index.
As this year draws to a close, market participants are starting to look at the challenges of the real for 2022, when the dollar is expected to benefit globally from higher US interest rates. At the local level, presidential elections could heighten market uncertainty in a period of likely weak economic growth.
The fiscal agenda is also on the radar, amid the perception that Brazil’s credibility has been shaken in recent months by government pressure for more spending, which ultimately led to the change in the spending ceiling rule through the PEC dos Precatório, recently enacted.
This Monday, there was an expectation of voting on the final report on the 2022 Budget in the Mixed Budget Committee.
In the last session, on Friday, the spot dollar rose 0.08%, to 5.6845 reais on sale.
In this trading session, the Central Bank will make a net offer of up to 14 thousand traditional exchange rate swap contracts, distributed between the maturities of August 1, 2022 and October 3, 2022.
The autarchy will also make available up to 15 thousand traditional exchange rate swap contracts to rollover the maturity of February 1, 2022.
(Edited by Camila Moreira)
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