O dollar fell 0.18%, quoted at R$ 4.795, around 9:28 am this Thursday (2), following the weak performance abroad, while the price of oil fell after the information that the OPEC+ will increase the production of the commodity more than expected, which can help contain the global inflationary scenario.
However, investors around the world resumed caution after data on the US economy. United States reinforce the perspective that there is room for the Federal Reserve be more aggressive in raising interest rates without taking the country into a recession.
The move would favor the dollar by making the US bond market more attractive, but, on the other hand, investments from other markets considered riskier, such as Brazil. At the same time, the rise in the prices of commodities and high interest rates still help the Brazilian market, reducing losses.
In this trading session, the Central Bank will auction up to 18,420 traditional foreign exchange swap contracts for the purpose of rolling over the maturity date of July 1, 2022.
On Wednesday (1st), the dollar rose 1.10% to R$4.806, the highest daily percentage increase since May 9. already the Ibovespa had a slight increase of 0.01%, to 111,359.94 points.
overall feeling
The month of May saw strong global risk aversion triggered by fears about a possible generalized recession due to a series of interest rate hikes around the world to contain inflation, 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 to the country’s fixed income due to its high security and favor the dollar, but harm bond markets and stock exchanges around the world, including the US.
On the other hand, with the end of lockdown in the Chinese city of Shanghai and easing restrictions in the capital Beijing, Chinese demand is expected to return to previous levels, which 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. Any change in that perception, however, harms both.
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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.
