Dollar Weakens Late in Trading Session, Closes Slightly Lower at R$ 5.69

The dollar’s value fluctuated throughout the trading day, influenced by various global and domestic factors.

Initially, the U.S. currency surpassed R$ 5.70 ($1.02) as investors considered the possibility of Donald Trump winning the U.S. elections. However, the dollar lost strength towards the end of the session.

New economic stimuli announced in China and a recovery in commodity prices contributed to the dollar’s late decline. The U.S. elections and caution regarding the fiscal scenario remained on investors’ radar.

The dollar closed at R$ 5.6904 ($1.02), down 0.15% against the Brazilian real. During the trading session, the U.S. currency reached R$ 5.7351 ($1.02), its highest intraday quote since August 6.

This performance aligned with the trend observed abroad. The DXY indicator, which compares the dollar to a basket of six global currencies, rose 0.31% today.

Several factors influenced the dollar‘s movement throughout the day. Ongoing caution about public accounts persisted, despite the fall in commodity prices and new stimuli in China.

Economic Outlook

Domestically, the market awaited the announcement of spending containment measures from the government. The expectation is that the government will announce new measures after the second round of municipal elections on October 27.

Roberto Campos Neto, President of the Central Bank, emphasized the importance of fiscal measures for lowering interest rates.

Campos Neto stated that it is challenging to achieve the inflation target when there is an unanchoring of expectations for public accounts.

He mentioned recent news about administrative reform and the expectation of measures after the elections. The Focus Report, released weekly by the Central Bank, showed increased projections for inflation this year.

The market raised its expectation for the Broad Consumer Price Index (IPCA) to 4.50% at the end of 2024, at the tolerance band’s ceiling.

Internationally, China reduced its benchmark lending rates in the monthly fixing, following other rate cuts last month. The People’s Bank of China (PBoC) announced a 25 basis point cut in its main interest rates.

The PBoC’s actions are part of a stimulus package to revive the economy. As a result, iron ore and oil prices rose more than 1% today.

Additionally, the U.S. currency has been gaining strength in recent days due to increased bets on Donald Trump’s victory in the U.S. presidential election.

This article was produced by The Rio Times’ automated newsroom system. How we use AI · Report an error

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