Dollar operates higher and exceeds the R$ 5.20 mark; Stock market is falling – 09/23/2022

Dollar operates higher and exceeds the R$ 5.20 mark; Stock market is falling – 09/23/2022
Dollar operates higher and exceeds the R$ 5.20 mark; Stock market is falling – 09/23/2022

The commercial dollar operated strongly in the early afternoon today. At around 1:25 pm (Brasilia time), the currency rose 2.53%, quoted at R$5,244.

The Ibovespa, the main index of the Stock Exchange (Bovespa) registered 111,064.06 points, a drop of 2.64% in relation to the previous day.

The move is mainly influenced by the prospect of rising interest rates in major economies, which fuels fears of a recession.

The dollar’s rally was widespread on Friday, with virtually all relevant currencies in the world losing ground against the US currency. The real was among the worst performing units on the day, alongside pairs such as the Chilean peso and the South African rand.

The day before, the dollar closed down by 1.14%, quoted at R$5.114, still reacting to the decision of the Copom (Monetary Policy Committee of the Central Bank), which maintained the Selic rate at 13.75% per year, interrupting the an aggressive cycle of monetary tightening.

The value of the dollar published daily by the press, including the UOL, refers to the commercial dollar. For those who are going to travel and need to buy currency at exchange brokers, the value is much higher.

risk aversion

The mood in international markets has been sour all week after several major central banks delivered more rate hikes to fight inflation, but worsened further on Friday after PMI data from Europe provided new evidence that countries in the region may be entering a recession.

“Global markets reflect fears of recession and operate lower… in a week that risk aversion has intensified after rising interest rates in the United States and weaker results of activity in the world”, said the department of research and economic studies of the Bradesco in report.

On Wednesday, the US Federal Reserve raised its interest rate by 0.75 percentage point for the third straight time, and indicated more hikes to come as it tries to rein in more persistent inflation than initially anticipated. by the authorities.

Other central banks, such as the European Central Bank (ECB) and the Bank of England, have also been resolute in tightening financial conditions and reining in spending, even at the cost of a slowdown in the economy, which has increased demand for assets considered safe bets in times of turmoil.

Dollar heads for weekly fall

Despite the bounce in this trading session, the dollar was still on track to close down more than 1% from last Friday’s close, after it retreated significantly in three of this week’s four full sessions.

“Until then we were immune to bad moods. The three markets here (exchange, shares and interest) reached new levels of good mood yesterday, against everything and everyone”, commented in a publication on Twitter Sergio Machado, partner and manager of Tropic.

“That there is some reason for this is a fact, as we have reached stratospheric levels of interest, as well as activity, and inflation has surprised for the good”, he said, although he considered that the local market is not an “island” compared to the rest of the world.

*With Reuters

The article is in Portuguese

Tags: Dollar operates higher exceeds mark Stock market falling

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