The dollar closed at a weekly high of 4.43% this Friday (10) due to investor concern about the fiscal framework in Brazil, European Central Bank (ECB) policies and inflation in the United States. This was the second consecutive weekly advance for the US currency.
The Ibovespa registered a loss of 5.06% this week. The index also reflected the uncertainties in the face of discussions about fuels, in addition to the drop in iron ore and oil.
On the first day of the week, the US currency ended up 0.38%. The real was hurt by an aversion to risk on the part of investors, who were cautious about possible measures that could harm the country’s fiscal framework by the federal government in an attempt to contain fuel prices.
The same reason was also responsible for the 1.63% increase on June 7th. This was the highest percentage increase since May 5 (2.34%).
On Wednesday (8), the movement about a possible fiscal lack of control and disrespect for the spending ceiling by the federal government made it have a withdrawal of investments in Brazil. Thus, the dollar had a high of 0.34%.
The next day, it closed up 0.53% in a volatile session after strong gains for the week. The main pressure factors on the currency were a movement to withdraw investments and the repercussion of the European Central Bank meeting.
As expected by the market, the autarchy decided to signal two interest rate hikes in July and September to try to fight a record inflation, above 8%.
The decision is an additional element to concerns about a global economic slowdown with interest rate hikes in several countries, damaging markets such as Brazil.
And, this Friday (10), the US currency rose 1.48%, after US inflation in May exceeded market expectations, accelerating again and reaching the highest value since 1981 in accumulated terms. 12 months: 8.6%.
The US data reinforces bets on a longer cycle of interest rate hikes by the Federal Reserve.
Ibovespa
The Ibovespa ended with a drop of 0.82% on Monday (6), also impacted by the internal scenario of uncertainties in the face of discussions about fuels. The following day, it had a slight drop of 0.11%
The same aspects on the domestic scenario also put the main index of the B3 down by 1.55% on Wednesday (8). What also harmed the index were shares of mining and steel companies, especially Vale, which closed slightly lower.
Top-traded iron ore for September delivery on China’s Dalian Commodity Exchange ended day trading down 0.5% at 926.50 yuan ($138.85) a tonne. On the Singapore exchange, July’s most active iron ore contract dropped 0.2% to $144.30 a tonne.
On the penultimate day of the week, the index fell by 1.18%, hampered by the domestic scenario, with a flow of capital withdrawals, and by fears about Chinese demand for iron ore.
And, this Friday (10), the Ibovespa dropped 1.51%, reflecting both the new expectations regarding US interest rates and the fall in iron ore in China after new restrictions, affecting shares of mining and steel companies.
*With information from Reuters
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Source: CNN Brasil
I’m Susan Karen, a professional writer and editor at World Stock Market. I specialize in Entertainment news, writing stories that keep readers informed on all the latest developments in the industry. With over five years of experience in creating engaging content and copywriting for various media outlets, I have grown to become an invaluable asset to any team.
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