Dollar Closes Bullish and Hits Second All-time High

RIO DE JANEIRO, BRAZIL – The dollar started the week higher against the real, with the combination of negative news in Brazil and abroad.

Here, the financial market reflected a potential truckers’ strike, while abroad, the rise in Covid-19 cases in countries that have tried to relax social isolation, such as Germany, China, and South Korea, has been a cause for concern.

On Monday, May 11th, the commercial dollar rose 1.5 percent and closed at R$5.824 – the second-highest in history. The tourism dollar rose slightly by 0.2 percent to R$6.05.

On Monday, truckers protested in the city of São Paulo against the extension of quarantine in the state. “Although many people do not agree with the reason for the protest, this class has a great impact,” said Vanei Nagem, an analyst at Terra Investments.

In the political scenario, President Bolsonaro is expected to veto the aid package to states and municipalities for the potential salary readjustment for civil servants. “He said between the lines that he will veto it,” said Jefferson Ruik, foreign exchange director at Correparti.

In South Korea, considered one of the countries that best controlled the pandemic, a new focus of the disease has emerged in a neighborhood in Seoul known for its nightlife. The increase in the number of infections led the country to backtrack and close bars and clubs again.

“Concern over a second wave of the disease has led investors to flee the risk,” Jefferson Ruik said.

The search for protection amid uncertainty about a potential second wave of the coronavirus has also made the dollar appreciate in other emerging economies. In addition to the real, the Mexican peso and Indian rupee have also depreciated against the US currency.

Source: Exame