Dollar rises nearly 1% as China data spurs risk aversion

O dollar rose 0.97%, quoted at R$ 5,123, around 9:25 am this Monday (15), benefiting from a resumption of risk aversion on the part of investors after data from the economy of the China below expectations, reinforcing fears about a global recession.

Retail sales and industrial production data had deceleration in July compared to the previous month and were lower than expected by the market, while real estate investment had a further decline.

In response to signs of an economic slowdown, the Chinese central bank cut interest rates country in an effort to stimulate the economy. Meanwhile, investors are looking for safe assets, and markets linked to commodities like the Brazilian, tend to be more affected by the prospect of lower demand.

In this trading 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 September 1, 2022.

On Friday (12), the dollar dropped 1.66%, to R$ 5.074, accumulating a weekly decline of 1.83%. already the Ibovespa rose 2.78% to 112,764.26 points, up 5.91% on a weekly basis.

overall feeling

Strong global risk aversion by investors, triggered by fears about a possible widespread economic slowdown due to a series of interest rate hikes around the world to contain record levels of inflation, has eased in recent days, reflecting expectations of a cycle of interest rate hikes. less aggressive in the United States.

The process of raising the US rate continued in July with a new increase of 0.75 percentage point. However, the Federal Reserve has signaled that it may make smaller hikes as the country’s economy already shows signs of slowing, seeking to avoid a recession.

Higher interest rates in the United States attract investments for the country’s fixed income due to its high security and favor the dollar, but harm markets and stock exchanges around the world, including the North American ones.

Investors also monitor the state of the economy of China , which also shows signs of a slowdown linked to a series of lockdowns in relevant cities. The Chinese government is expected to intensify an effort to stimulate the economy, which should help maintain high demand for commodities.

In the domestic scenario, the Benefits PEC which creates or expands social benefits with an estimated cost of R$ 41 billion, was poorly received by the market, as it reinforces the fiscal risk by bringing new spending above the ceiling.

The Ibovespa and the real were harmed by the scenario, but an apparent greater optimism in the market has allowed a recovery.