Dollar rises 2.62% on the day with external risk aversion; in the week, it drops 0.20% – 09/23/2022

Dollar rises 2.62% on the day with external risk aversion; in the week, it drops 0.20% – 09/23/2022
Dollar rises 2.62% on the day with external risk aversion; in the week, it drops 0.20% – 09/23/2022

After a detachment from the troubled external environment in recent days, the real was engulfed this Friday, 23, by the wave of risk aversion that took hold of markets around the world. The derailment of the European economy, attested by disappointing readings of economic indicators, and the prospect of more intense and stronger monetary tightening in the United States, given the harsh tone of the Federal Reserve (Fed, the North American central bank) in the fight against inflation, provoked a global run on the US currency and depressed commodity prices.

With the specter of recession in developed economies on the radar, the dollar has already started the day on a steady high, above R$5.20, and ran up to R$5.25 in the early afternoon. The maximum, at R$5.2644 (+2.93%), came in the last two hours of trading, amid a sharper fall in stock indices in New York, replicated by Ibovespa, after a speech by the president of the American BC , Jerome Powell.

At the end of the session, the currency rose 2.62% to R$5.2485. As a result, the dollar, which on Thursday showed an accumulated drop of 2.76% in the last four days, ended the week with a low of only 0.20%. In the month, it presents gains of 0.90%.

“The real had been holding up well in recent days, with a good performance against a basket of currencies. But today, with the stock markets picking up, the fall in commodities and the search for the American currency, it did not resist”, says the CIO of Alphatree Capital, Rodrigo Jolig, who still maintains a constructive vision for Brazilian assets, despite doubts about fiscal policy in 2023. “The economist is growing and we have high interest rates in favor of the real. commodities and this scenario of a strong dollar in the world.

Outside, the DXY index – which measures the performance of the dollar against six strong currencies – rose more than 1.5% and surpassed 113,000 points, with a maximum at 113,228 points. The euro lost more than 1.5% against the dollar. The pound sterling melted, down more than 3%, after the UK government announced a plan to cut taxes and subsidies, costing analysts a further £150bn over the next two years.

In a speech on Friday afternoon, Powell said that the US central bank is dealing with an “exceptional economic situation” and that it is “committed to using all the tools to see the economy overcome this challenging period”.

For Alphatree Capital’s Jolig, the market appears to be “finally understanding” that the Fed will do whatever it takes to contain inflation, which means tightening financial conditions until the economy slows and the job market cools. “The Fed will raise interest rates and end up generating a recession. The other central banks are trying to react in a messy way, which causes this confusion in the markets”, she says.

In the morning, the Brazilian Central Bank announced a line auction (sale of dollars with repurchase commitment) of up to US$ 2 billion, fully absorbed by the market. According to operators, the BC’s action is not related to the upturn in the US currency, but to the supply of a specific demand for dollars for a specific operation.


The article is in Portuguese

Tags: Dollar rises day external risk aversion week drops

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