U.S. Dollar Hits Highest Exchange Rate: Daily

Over the past year, the U.S. dollar has been rapidly overtaking the Brazilian real

By William Jones, Contributing Reporter

RIO DE JANEIRO, BRAZIL – One U.S. dollar soared to R$2.391 on the close of trading in São Paulo on Thursday, January 2nd, marking the biggest decrease in conversion of the currency in four months. Analysts attribute the decline can be attributed to the Brazilian government’s plan to reduce the amount of intervention the make in support of the national currency.

U.S. Dollar Hits Highest Exchange Rate, Rio de Janeiro, Brazil News

The decline of the real against the dollar is giving less purchasing power to Brazilian consumers, photo by Milad Mosapoor/Wikimedia Creative Commons License.

Thursday was the first time the Brazilian real has fallen to a level lower than R$2.4 to the dollar since August and the reaction is largely due to a withdrawal of billions of real’s worth of funding to prop up its struggling currency.

“The central bank’s intervention is now lighter and should have less of an impact on the market,” Marcelo Schmitt, the fixed-income director at Sulamerica Investimentos in São Paulo, told the international news agency Reuters.

The Brazilian government’s new initiative, announced on December 18th and deemed the “daily ration,” draws back its power to stop the dollar becoming stronger but can still affect currency fluctuations by limiting the amount of currency the government swaps and auctions off.

A spokesman for the Central Bank said that “the program will now offer a weekly R$1 billion instead of the R$3 billion of the previous week’s program, which included the line auctions. This means less impact to prevent high dollar.”

The dollar ended the trading session high of 1.44 percent on Thursday making meager reading for the Brazilian government who face a general election in the latter half of 2014, as well as Brazilian interests abroad. The tourism dollar, however, ended its trading at R$2.52 to the dollar, which makes happy reading for U.S. citizens looking to enter the country during Carnival at the end of February.

Read more (in Portuguese).

* The Rio Times Daily Updates feature is offered to help keep you up-to-date with important news as it happens.

8 Responses to "U.S. Dollar Hits Highest Exchange Rate: Daily"

  1. Mike in São Paulo  January 4, 2014 at 1:15 PM

    My income is mostly in dollars, so the higher the dollar goes the better for me.

  2. Bob  January 4, 2014 at 2:21 PM

    You’re welcome.

  3. Mauro Balbino  January 4, 2014 at 6:01 PM

    The Great Fiction gets closer to end.

    Hi Mike.
    My wages are in Sterling Pounds, but I do think that to be surrounded by inequalities does affect us all.

  4. Nicholas  January 4, 2014 at 11:36 PM

    1 Good for the tourists who wants to go for the carnaval and world cup (I bet the exchange will stay around this level for this year).
    2 Good for residents in Brazil that earn dollars in Brazil.
    3 Proves the US “QE program” (in reality a bailout program to keep the zombie banks alive) that suppose to keep the dollar low and export itself (whatever it still produces, which is not much) out of the mess they are.
    4 Not so good news for Brazilians who want to shop for their made in china products in the malls in Miami and the ones who want to visit disney world in Orlando.
    5 Good for Brazilian exports, great for job creation is good for local producers (after all, wealth is measured by producing, not by consuming), but negative for imports unless it’s compensated, which can be done, with some tax incentatives for very very important products/components the local economy needs for local consumption and exports.

  5. Nicholas  January 4, 2014 at 11:54 PM

    3 Proves the US “QE program” (in reality a bailout program to keep the zombie banks alive) that suppose to keep the dollar low and export itself (whatever it still produces, which is not much) out of the mess they are..does NOT work. (I forgot to add that).

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