US dollar rises to R$5.13 as interest rates in Brazil and the US are forecast

RIO DE JANEIRO, BRAZIL – The financial market had another tense day awaiting decisions about basic interest rates in Brazil and the United States.

The dollar rose for the seventh time in a row and reached its highest value in a little over a month.

The stock market had its eighth consecutive drop and reached the lowest level since the beginning of the year.

On Tuesday, June 14, the commercial dollar closed at R$5.134, up R$ 0.019 (+0.38%). The quote even operated in a fall during the morning but firmed the uptrend after the market opening in the United States.

The US currency has been at its highest level since May 12, when it closed at R$5.14. The currency rose 8.02% in June but accumulated a drop of 7.93% in 2022.

In the stock market, the day was also marked by nervousness. The Ibovespa index of the B3 closed at 102,603 points, down 0.52%. The indicator came to operate at a high in early trading but reversed the movement during the morning.

The stock market has been at its lowest level since January 10, when it was around 101,000 points.

Despite the Ibovespa’s fall, Eletrobras’ shares rose after the privatized company’s debut on the stock exchange.

The common stock (with voting rights at shareholders’ meetings) rose 3.37%. Preferred shares (with preference in the distribution of dividends) rose 2.36%.

As in the last few days, the financial market acted in a wait-and-see fashion. On June 15, the Brazilian Central Bank and the Federal Reserve (Fed) will announce the new interest rates.

In Brazil, it is expected that the Monetary Policy Committee (Copom) will raise the Selic rate (economy’s basic interest rate) by 0.5 percentage points to 13.25% a year.

What is causing turbulence in the financial market is the future of prime rates in the United States.

With inflation in the planet’s largest economy at 8.6% in the last 12 months, the highest level in 41 years, investors fear that the Fed will tighten its belts and raise interest rates by 0.75 percentage points to a range between 1.5% and 1.75% per year.

Higher rates in advanced economies provoke capital flight from emerging countries like Brazil.

With information from Reuters