O dollar fell 0.38%, quoted at R$ 4,720, around 9:28 am this Monday (30), maintaining a new trend of devaluation against the real thanks to greater investor optimism about the global economy.
Sentiment continued to gain strength in this session after the city of Shanghai in China announce that it will lift a lockdown linked to Covid-19 on June 1, allowing the resumption of activities in the country’s largest economic center.
In this session, the central bank will auction up to 15 thousand traditional foreign exchange swap contracts for the purpose of rolling over the maturity date of July 1, 2022.
In the previous week, the dollar fell by 2.73%, in the third consecutive weekly decline, ending Friday (27) at R$4.738. O Ibovespa had the third consecutive week of appreciation, rising 3.18% and ending the last session at 111,941.68 points.
overall feeling
The month of May began with strong global risk aversion triggered by fears of a possible global recession.
The first instigator of this feeling was the lockdowns in china to try to contain Covid-19, projections of a strong economic slowdown and even the risk of a global recession have increased, hurting markets and increasing investor risk aversion.
There is also a series of interest rate hikes around the world, which tend to slow down the global economy. The main one occurred in the United States announced by Federal Reserve on May 4th. 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 stock exchanges around the world, including the North American ones.
However, with the prospect that restrictions in China will be withdrawn in June Chinese demand is expected to return to previous levels, which once again favored commodity exporters and relieved some of the pressure on the real.
At the same time, the confirmation of the contraction of the US economy in the first quarter reinforced the view that the Fed will not be as aggressive in raising interest rates as previously anticipated. With the two novelties, the Ibovespa and the real found room for appreciation.
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Each Ibovespa point is equivalent to 1 real. This statement is
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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.
