By Luana Maria Benedito
(Reuters) – The dollar showed instability on Monday, but surpassed 5.27 reais at the peaks of the session, with the persistence of domestic political-fiscal fears keeping the demand for the safety of the US currency strong.
At 10:07 (Brasília time), the spot dollar retreated 0.06%, at 5.2484 reais on sale. After opening lower, the US currency gained strength throughout the morning and jumped 0.46% at the maximum, at 5.2760 reais, before cooling down and alternating light highs and lows.
On B3, at 10:07 (GMT), the dollar futures contract of the first month rose 0.05%, at 5.2565 reais.
This move comes after the spot dollar has already registered a high of 0.43% in the last session, on Friday, at 5.2518 reais, the highest level since February 8 this year (5.2604), driven by local weather. aloof.
If it remains in the blue until the end of this Monday’s trading, the dollar will have advanced by the 13th of 15 trading sessions.
Local fiscal fears have gained strength since Senator Fernando Bezerra Coelho (MDB-PE), rapporteur for the so-called PEC on Fuels, stated that the text will include in the Federal Constitution an increase of 200 reais in the value of Auxílio Brasil, readjustment of the gas allowance around 70 reais and the creation of a “trucker voucher” worth 1,000 reais.
These are proposals that suggest an increase in public spending in the short term and a possible breach of the spending ceiling, warned analysts at Genial Investimentos in a report.
“More worrying is the offensive of members and supporters of the government to change important structural reforms that were approved in the last six years and that have been fundamental to generate fiscal balance”, they continued, saying they see a threat to the State-owned Companies Law in the midst of what is happening. many see it as political interference in Petrobras.
The oil company is in the process of changing command after José Mauro Coelho resigned as CEO early last week amid pressure from the Executive for a change in the company’s fuel price parity policy. Caio Paes de Andrade, a government nominee, should be approved as the state-owned company’s new chief executive this week, according to sources.
“In the face of this offensive, the prices of financial assets have returned to negative territory: exchange rate devaluation, fall in stock prices and increase in interest rates, reversing a positive trajectory that had persisted since the beginning of 2022”, said the experts at Genial.
The dollar reduced its losses for the year against the real to just under 6%, and is already almost 14% above the low for the end of this year, of 4.6075 reais, reached in early April after a brilliant first quarter for the currency. Brazilian.
Abroad, there were few catalysts for the market on Monday, which allowed for some appreciation of the shares. The dollar was hovering around stability against a basket of strong currencies, but it had gains against several currencies considered risky, such as the Australian, Mexican and South African.
Bradesco said in a note to clients that this week’s highlight will be the release, on Thursday, of North American inflation data measured by the PCE index, a favorite of the Federal Reserve, the central bank of the United States, to assess the pace of growth. of consumer prices.
“Throughout the week, discussions around the conduct of monetary policy in the United States and the rest of the world, as well as its impacts on economic activity, should remain on investors’ radar,” added the bank.
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