The dollar closed sharply higher this Monday (26), on a day marked by risk aversion abroad, while the final stretch of the electoral race in Brazil contributes to the caution of investors.
The US currency rose 2.52% to R$5.3804 – the highest value in two months (July 22, R$5.4977). At the maximum of the day, it reached R$ 5.4164. see more quotes.
As a result, the dollar accumulates a high of 3.45% in the month. In the year, it has fallen by 3.49% against the real.
The Ibovespa had sharp drop, and again lost 110 thousand points.
What is messing with the markets?
Financial market believes in interest rate maintenance, says economist
Global markets are under pressure from overseas monetary tightening and recession concerns. At the international level, investors monitor volatility in the United Kingdomwhose currency fell to a historic low this morning, and in the rest of Europe, where there is a possibility of recession and the monetary authorities seek to fight the rise in prices.
The Bank of England (BoE) said on Monday it was monitoring financial markets closely and would not hesitate to change interest rates if necessary. “The bank is monitoring developments in the financial markets very closely in light of the significant repricing of financial assets,” he said.
“The Monetary Policy Committee will not hesitate to change the interest rate as necessary to bring inflation back to the 2% target on a sustainable basis over the medium term, in line with its mandate,” he added.
The European Central Bank (ECB) should continue to raise interest rates decisively, as there is a high risk of inflation stagnating at levels above its 2% target, Bundesbank President Joachim Nagel said on Monday. .
“The risk that long-term expectations will be unmoored remains high,” Nagel said in a speech. “More decisive action is needed to bring the inflation rate down to 2% over the medium term.”
The ECB has already raised its benchmark rate by 125 basis points to 0.75%, the fastest pace in its history. Investors now expect its deposit rate to exceed 3% next year, the highest level since 2008, before the height of the global financial crisis.
Last week, decisions were announced on interest rates on USA and from Brazil.
O Federal Reserve (Fed), o US central bank, raised the country’s interest rates to a range of 3% to 3.25% – an increase of 0.75 percentage point. It was the fifth time this year that interest rates were raised. The new hike took the US benchmark interest rate to its highest level since 2008, just before the country went through its biggest crisis since the stock market crash in 1929.
interest rate hikes in USA tend to be reflected in a rise in the dollar exchange rate in Brazilsince the currency leaves the country, with the objective of seeking the best remuneration abroad.
O Brazilian central bank decided to keep interest rates at 13.75% – but sent a clear message that, if inflation presses again, the Selic may rise again in the future.
Financial market economists reduced the inflation estimate for this year from 6% to 5.88%. It was the 13th consecutive drop in this year’s inflation estimate. It is also the first time since March this year that the forecast is below 6%.
The forecast of bank economists for the economy is for growth of 2.67% in 2022, against the 2.65% previously forecast. The projection for the dollar for the end of 2022 remained stable at R$5.20. For 2023, it also remained unchanged at R$5.20.