Dollar Records 5th Straight Drop, Again Closes Below R$5.40

RIO DE JANEIRO, BRAZIL – The US dollar closed down on Tuesday, May 26th, reflecting optimism about the reopening of the world’s major economies and the prospects of a new potential vaccine proving effective against the coronavirus.

In this session, the commercial dollar dropped 1.8 percent and closed at R$5.36; the tourism dollar also retreated 1.8 percent and closed at R$5.57.

This time the market placed its hopes on the prospect of a vaccine developed by Novavax in the US state of Maryland. The day before, the company announced that it had started the human trial stage.

The race for the vaccine has been one of the main sources of optimism along with the reopening of economies.

In the United States, home to the highest number of people infected with the disease, all states have now begun the process of reducing social isolation. In New York, the epicenter of the country’s coronavirus pandemic, the New York Stock Exchange (NYSE) restarted its in-person trading session yesterday, after a two-month interruption.

“Investors are less fearful, so they leave the safe haven, which is the dollar, and turn to risky assets,” said Jefferson Ruik, Correparti’s foreign exchange director.

With the world’s leading economies moving away from the stricter quarantine measures, Ruik believes the dollar could lose even more value against the real. “The dollar is still high. It’s only at such levels because of the pandemic,” he said.

Abroad, the US currency has also depreciated against major emerging currencies such as the Mexican peso, the Russian ruble, and the Turkish lira. The Dxy index, which measures the dollar’s performance against a batch of strong currencies like the euro, also lingered in negative territory.

In the previous trading session, the US currency had depreciated two percent against the real, with investors considering lower political risk, following the release of the video recording of President Jair Bolsonaro’s April 22nd cabinet meeting.

Source: Exame

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