Dollar Reverses Climb, Closes Slightly Down with External Relief

RIO DE JANEIRO, BRAZIL – The dollar has reverted the high observed throughout Thursday’s session, September 17th, and closed with a slight drop of 0,92 percent, at US$5,238, a new minimum since July.

The relief in the currency’s rate, which rose as much as one percent in the first trading hour, was sustained by its performance against other currencies, but with investors still digesting information about interest rates – both in Brazil, by the Central Bank’s COPOM (Monetary Policy Committee), and by the Fed (Federal Reserve, American Central Bank).

In the US, the Fed announced a projection of stability in US Treasury interest rates between zero and 0.25 percent per year up to 2023. In Brazil, the Central Bank also announced the maintenance of the SELIC at two percent per year.

“Typically, monetary easing, with interest rate reductions or their maintenance at low levels is positive for the stock market. But in the Fed’s case, this signaling in relation to interest rates proves a great concern with economic rebound, a situation that has made investors more anxious and more risk-averse,” said Eduardo Plastino, a member of União Investments.

“Moreover, in Brazil the market is also digesting the maintenance of the SELIC by COPOM which, despite being fairly priced, still draws attention to the country’s fiscal issue, with our relationship between debt and GDP [Gross Domestic Product] nearing 100 percent,” added Plastino.

The IBOVESPA, the main stock index of the country, gained strength with the rise in Vale and Petrobras shares on Thursday. The index closed up 0.42 percent, at 100,097 points. Vale’s shares rose 1.82 percent, while Petrobras’ rose 2.23 percent (common, with voting rights) and 1.93 percent (preferred, without voting rights).

Abroad, the S&P 500 and Dow Jones indexes retreated 0.84 and 0.47 percent, respectively. The Nasdaq Exchange, in New York, had a drop of 1.27 percent, while the Euro Stoxx 50, the main European stock index, fell by 0.67 percent.

Source: Folhapress