Dollar closes at its lowest value in two months at R$4.86

As the release of lower-than-expected consumer inflation data in the United States this Tuesday, November 14, caused the global financial market to enter a day of euphoria. Thus, investors’ greater risk appetite pushed the dollar below R$4.90.

This is the lowest price in almost two months. Furthermore, the optimistic bias caused the stock market to rise more than 2%, reaching the highest level since August 2021. The commercial dollar closed this Tuesday (14) sold at R$4.862, with a sharp drop in R$ 0.046 (-0.93%).

Dollar movements and market reactions

At the beginning of the day, the currency’s price was stable, but plummeted with the announcement that consumer inflation in the United States was zero last month and 3.2% in the 12 months ending in October. In September, the index rose 0.4% and added 3.7% in 12 months. According to the release, the indicator slowed down in October and was below market consensus estimates.

It is already the third consecutive fall of the North American currency in the very short term. However, in the two previous trading sessions the declines were of lesser intensity. The price is at its lowest value since September 18, when it closed at R$4.85, that is, showing a drop of 3.55% in November and 7.92% in 2023.

From the same point of view, the movement of the stock market had its impacts with a day of strong gains. The Ibovespa index, from B3, closed at 123,166 points, showing an increase of 2.29%. Thus, at the highest level since August 3, 2021, driven by the prospect that the cycle of rising interest rates in the United States is close to an end. In other words, believing that the slowdown in prices reduces the pressure for the Federal Reserve (Fed, North American Central Bank) to raise basic interest rates from the current 5.25% and 5.5% per year.

Therefore, stable interest rates with space to estimate when the cycle reversal will come ended up encouraging investors. Consequently, it strengthens the movement of money to emerging countries, such as Brazil, putting downward pressure on the dollar and increasing the value of the stock market.

*Source: Reuters and Agência Brasil

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