Moody’s reaffirmed Brazil’s credit risk rating at “Ba2” on Wednesday. The agency changed the country’s outlook from “stable” to “positive”, according to a statement from the rating agency.
Agency explained the change in perspective. According to Moody’s, the change is supported by the assessment that “more robust growth, combined with continued, albeit gradual, progress towards fiscal consolidation, could allow the stabilization of Brazil’s debt burden.”
Several market participants cited this development as positive for Brazilian assets. Despite this, investors highlight that it does not mean that it is possible to let down our guard in relation to the country’s fiscal health, with Moody’s itself citing “fiscal solidity is still relatively weak”.
Abroad, Fed authorities decided on Wednesday to maintain interest rates in the range of 5.25% to 5.5% per year. The decision was unanimous and is in line with financial market expectations. And although Fed Chair Jerome Powell indicated that high inflation could delay the expected rate cut, he refused to endorse discussions that the rate could, in fact, be raised again.
Powell’s speech brought relief to international markets, according to Guilherme Esquelbek, from Correparti Corretora. Overseas markets have recently postponed or even discarded bets on monetary easing by the US central bank this year. Higher interest rates in the US play in favor of the dollar, as they make US yields more attractive to foreign investors.
On Friday (3), the US non-agricultural employment report will come into the focus of investors. The release of this data could provide more clues about the health of the economy and the need for interest cuts.
Tags: Dollar falls Fed credit outlook country Stock market rises
