U.S. Dollar Closes at Lowest Value in Two Months in Brazil

By Lise Alves, Senior Contributing Reporter

SÃO PAULO, BRAZIL – The U.S. dollar depreciated against the Brazilian real for the fourth day in a row on Thursday, below R$3.20/US$1 and at its lowest value in more than two months. The depreciation was influenced by both foreign and domestic news.

The U.S. dollar closed at R$3.182/US$1, down by 0.57 percent after Brazil’s Speaker of the Chamber, Rodrigo Maia, said that the project amending the rules for repatriation by Brazilians with assets abroad can return to the Chamber’s agenda as early as next week if there is agreement among Congressional Representatives.

“The news of repatriation was not expected and helped the dollar to weaken against the real,” operator of Advanced brokerage house, Alessandro Faganello, told Reuters.

Another factor to influence the devaluation of the U.S. dollar in relation to the Brazilian currency was the decline in fuel stock in the United States, which pushed up international oil prices.

The U.S. currency has already devalued by 2.16 percent in October and by 19.41 percent since January 1st 2016.

As it has done in recent days, the Central Bank (BC) purchased on Thursday US$250 million in the futures market to limit the decline of the U.S. currency. In all 5,000 reverse currency swap contracts were auctioned off.

As international oil prices increased, so did Petrobras stock values, which led Brazil’s Stock Exchange (Bovespa) to register gains. Ibovespa shares (Bovespa’s main index), closed up by 0.15 percent, at 61,118 points. Brazil’s stock market registers an appreciation of 4.71 percent for the month of October and is up by 40.99 percent for the year.