Brazil’s Stock Exchange suffers month’s biggest daily drop driven by external factors

RIO DE JANEIRO, BRAZIL – The Ibovespa index, from B3, the Brazilian stock exchange, closed Thursday, August 26, at 118,724 points, down 1.73%. With yesterday’s performance, the indicator now accumulates a loss of 3.08% in August.

The commercial dollar closed out the day at R$5.257, up R$0.046 (+0.87%). At the day’s peak, at around 4:00 PM, the quotation reached R$5.27. The dollar accumulated a 0.046% rise. The currency has accumulated a high of 0.9% in August and 1.31% in 2021.

After several calm days, the international market had a tense day amid expectations over statement by the president of the U.S. Federal Reserve (Fed) Jerome Powell. The North American stock markets closed down after several record highs in past sessions.

Today, August 27, Powell will speak at a Fed symposium and indicate if the agency intends to anticipate the withdrawal of monetary stimulus – interest rates at their lowest level in history and bond purchases – granted during the Covid-19 pandemic.

Lower interest rates in developed economies benefit emerging countries like Brazil, because they attract foreign capital to higher interest rate economies.

In parallel, the decline in the price of some commodities (primary goods with international quotation) has influenced the market in countries exporting agricultural and mineral goods.

The increase in Covid-19 cases resulting from the Delta variant of the novel coronavirus and the regularization of supply in Mexico led to a 1.6% drop in international Brent crude oil prices.