Brazil’s Bovespa Down, Dollar Up With Trump Win

By Lise Alves, Senior Contributing Reporter

SÃO PAULO, BRAZIL – As expected, financial markets around the world reacted badly to the victory of Donald Trump as the United States’ next President. In Brazil it was no different. Minutes before Brazil’s main stock market, São Paulo Bovespa, opened on Wednesday, November 9th, economists and financial planners braced for what could be one of the worst days for the Brazilian economy this year. By mid-morning their fears were justified.

The Bovespa opened down by more than three percent and at 10:20AM was registering a 3.24 percent drop, at 61,794 points, while the US dollar, which on Tuesday closed at R$3.16/US$1, surged to R$3.24/US$1 just before 10AM.

“I think the dollar could go to R$3.30/US$1 by next week because no one was pricing Trump’s victory,” Marcos Jamelli, brokerage analyst at Gradual Investimentos, was quoted as saying by Reuters. The latest Focus Report by the Central Bank forecasts the foreign exchange rate at the end of the year at R$3.20/US$1.

Brazil’s Central Bank President Ilan Goldfajn told reporters Wednesday that his team was monitoring the situation. “My comment will be on the markets. We are following the global markets and Brazil and, if necessary, we will take the appropriate measures,” Ilan Goldfajn said, according to Agencia Brasil.

The stunning Trump victory brought down stock markets elsewhere as well. In Asia stock markets closed down, with the highlight going to Japan, which registered a loss of over five percent in its bourse. European stock markets dipped far into negative territory when US media declared Trump the winner, but reacted somewhat favorably after Trump’s first speech as president-elect, seen as more conciliatory than threatening.