Dollar goes to R$ 5.20 and stocks fall on fears of inflation and high interest rates in the world

Dollar goes to R$ 5.20 and stocks fall on fears of inflation and high interest rates in the world
Dollar goes to R$ 5.20 and stocks fall on fears of inflation and high interest rates in the world

Bloomberg Línea – Concerns about aggressive tightening of monetary policies around the world weighed again on the markets this Friday (23), leading to falls in European and Wall Street stock exchanges. Risk aversion contributed to an appreciation of the dollar, which traded close to R$5.20 this morning.

Here, the Ibovespa (IBOV), which advanced in the previous session, pulled by commodities and the relief with the pause in the Selic’s high cycle, gave in to the negative sentiment from the outside. At around 10:15 am (Brasília time), the main equity index on the Brazilian stock exchange dropped 1.8%, trading at around 112,000 points.

The decline in risky assets in global markets has deepened as the UK government’s plan to boost its economy with tax and spending cuts stoked concerns about a slowdown in growth.

Yields on UK five-year bonds saw their biggest increase on record by Bloomberg News in 30 years after Chancellor of the Exchequer Kwasi Kwarteng outlined the most radical package of government tax cuts since 1972.

The pound fell to the lowest level since 1985 and traders upped bets that the Bank of England will raise rates by one percentage point at its November meeting. Investors and economists have expressed concern that the package will drive Treasury debt to unaffordable levels and increase inflation.

The monetary tightening movement follows the decision of the Federal Reserve on Wednesday (21), in which the monetary authority raised US interest rates by 0.75 percentage point, the third consecutive increase of this magnitude, taking the rate to the highest level in 14 years.

Check out the performance of the markets this Friday (23):

  • At around 10:15 am (Brasília time), the Ibovespa dropped about 1.8%, to 112,024 points;
  • The spot dollar advanced 1.52%, at R$5.19;
  • Among future interest contracts, the DI for 2025 rose six basis points, to 11.54%;
  • In the US, futures indexes retreated: the Dow Jones fell 1.19%, the S&P 500, 1.17%, while the Nasdaq was down 1.01%;
  • In Europe, the movement was also downward: the FTSE index, from the United Kingdom, fell by 1.96%, for example.

Read too:

Dollar renews high and drops euro and pound as risk escapes after interest rate hikes

The article is in Portuguese

Tags: Dollar stocks fall fears inflation high interest rates world

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