THE dollar fell 0.35%, quoted at R$ 4.925, around 9:27 am this Wednesday (18), reflecting a reduction in global risk aversion on the part of investors which favors a search for assets considered more risky, in the case of emerging markets.
The improvement in investor sentiment is linked to the expectation that the China reduce movement restrictions to combat Covid-19 in cities such as Shanghai and Beijing as a new outbreak of the disease is brought under control. As a result, the country’s economic activity tends to recover, reducing fears of a global recession.
In Brazil, investors will be attentive to the resumption of the trial of the capitalization process of electrobras by the Federal Court of Auditors (TCU ). The expectation is that the process is approved, allowing its conclusion this year.
On Tuesday (17), the dollar dropped 2.14% to R$4.942, the biggest daily percentage decline since July 24, 2021. Ibovespa rose 0.51% to 108,789.33 points.
global pessimism
The most recent instigator of global risk aversion was the interest rate hike in the US , announced by the Federal Reserve on May 4. Despite discarding hikes of 0.75 pp or a risk of recession, the municipality signaled at least two more hikes of 0.5 pp
Higher interest rates in the United States attract investments for the fixed income of the country due to its high security, but it harms the exchanges around the world, including the North American ones.
Along with a series of interest rate hikes around the world, lockdowns in china to try to contain Covid-19, projections of a strong economic slowdown have increased, hurting markets.
The growth of exports Chinese companies even slowed to single digits, the weakest level in almost two years, while imports barely changed in April, amplifying economic concerns.
However, with the prospect that these restrictions should be lifted between May and June, Chinese demand is expected to return to previous levels, which would once again favor commodity exporters and relieve some of the pressure on the real.
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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.
