O dollar stability on Monday (14), with risk-averse investors as they await interest rate decisions on Wednesday (16) in the United States, with expectations that the Federal Reserve will begin an upswing cycle, and in Brazil, where the market projects a 1 percentage point increase by the Monetary Policy Committee (Copom).
The decline in the price of some commodities, especially iron ore and oil, hurt the real. The first falls due to a increase in Covid-19 cases in China and the implementation of a lockdown in an economically relevant area, while the second corrects prices after reaching records with the war in ukraine.
At around 9:22 am, the US currency was down 0.02%, quoted at R$5.053. The dollar futures contract traded on B3 had a fall of 0.44%, to R$ 5.052.
In the previous week, the dollar retreated 0.48%, ending Friday (11) at R$ 5.054. already the Ibovespa had a drop of -2.4%, around 111 thousand points.
Petroleum
Since the invasion of Ukraine by Russia on the 24th of February, the markets for Petroleum show the highest volatility in two years, with commodity prices reaching levels last seen in 2008.
The movement in recent days, with a slight decline and around US$ 110 a barrel, is a reflection of the Russian and other exporting countries’ commitment to fulfilling contractual obligations. Some investors say concerns about supply disruption have been overblown.
The main factor for the increase is the mismatch between supply and demand for the commodity, with the main producers, meeting in OPEC+, still not resuming pre-pandemic production levels, and the situation was intensified with the tensions in europe.
One consequence of rising oil prices, however, is the rise in fuel prices. In Brazil, this accelerated the approval of bills that seek to contain the rise in fuel prices, which are also on the market’s radar.
The Congress approved a proposal that changes the ICMS calculationwhich has already been sanctioned by the president, while another that creates a price stabilization fund already passed the Senate and needs to be analyzed in the Chamber.
Despite representing additional expenditures for the government, the approval was seen as positive by investors, as it should prevent the advancement of proposals that would have even greater fiscal risks.
commodities
The situation in Ukraine may impact the benefits for the real of an investment migration cycle started in 2022 to markets linked to commodities and seen as cheap, like Brazil – also helped by the high interest rates in the country, by stimulating the search for the dollar.
On the other hand, the rise in commodities itself may favor the Brazilian market, in a game of positive and negative pressures that has still favored the real so far.
The cycle is linked, in part, to the rise in oil and iron ore prices due to high demand amid the economic recovery. The prospect of higher interest rates in the United States also fueled this migration, with the departure of US variable income.
Another factor behind this movement is expectations of more pro-growth measures in the China that are raising hopes of a recovery in demand for metals, which has led to higher prices, reinforced by the crisis in Ukraine.
On the other hand, interventions by the Chinese government in the market have generated downward pressures, in an up and down in the price.
War in Ukraine
Follow CNN’s live coverage of the conflict.
Two weeks after Russian President Vladimir Putin invaded ukrainethe country’s ground forces are working to seize territory, with the Ukrainian capital, Kievresisting much longer than previously anticipated.
The two countries will hold a fourth meeting this Monday to negotiate a stop fire 24-hour aid to civilians. Meanwhile, the Ukrainian capital continues to be the target of attacks, as well as the city of Mariupol, which is under siege by Russian troops.
From an economic point of view, the main event involving the conflict is the series of sanctions announced by the United States and its Western allies.
Among them are the expulsion of Russian banks from Swifta global payments system, and the freezing of reserves by the central bank of Russia.
Countries that support Ukraine have already said they must implement new sanctions against Russia, which has seen its currency, the ruble, plummet and reach a historic low.
Putin, on the other hand, claimed that the sanctions westerners against russia are not legitimate and that governments are deceiving their own people. He also stressed that the country would resolve its problems calmly.
The VIX, called the “fear index” for trying to measure the degree of market volatility, rose to around 31 points, after reaching its highest level since September 2020.
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*With information from Reuters
Source: CNN Brasil
I am Sophia william, author of World Stock Market. I have a degree in journalism from the University of Missouri and I have worked as a reporter for several news websites. I have a passion for writing and informing people about the latest news and events happening in the world. I strive to be accurate and unbiased in my reporting, and I hope to provide readers with valuable information that they can use to make informed decisions.
