Brazil: US Dollar rises for the 3rd day in a row and closes at R$4.99

RIO DE JANEIRO, BRAZIL – On April 26, the commercial dollar rose 2.36% to R$4.99. It is the highest value since March 18, when the currency closed at R$5.02. Ibovespa, the B3 (São Paulo Stock Exchange) index, closed at 108,212 points, down 2.23%.

Analysts and investors in the financial market expect a stronger rise in interest rates in the United States, which will attract capital to the country. Moreover, they anticipate next week’s meeting of the Copom (Monetary Policy Committee) in Brazil, which will define the basic rate, the Selic. Part of the market evaluates that the Central Bank is less favorable to continue with the stronger cycle of interest rate hikes used to control inflation in the country.

Also on investors’ radar are the lockdown measures in China to control covid-19 infections. There is an international fear of less heating up the country’s economy, which impacts global growth. Investors are also paying attention to possible proposals to expand public spending and the conflicts between the Branches of Power in Brasilia.

The US currency rose for the third day in a row. During this period, the exchange rate rose from R$4.62 to R$4.99, corresponding to a rise of 8%. The CB sold US$500 million in an extraordinary auction of 10,000 forex swap contracts on April 26 but did not prevent the dollar from rising.

The US currency reached an annual low of R$4.61 on April 4. It returned to the highest level since March 18, 2022 (R$5.02).

The Ibovespa, on the other hand, falls for the seventh consecutive trading session. The “bad mood” in the market is also reflected in the main global indexes. In the United States, the Dow Jones fell 2.38%. The Nasdaq tumbled 3.95%. The S&P 500 fell 2.81%.

With information from Poder360