RIO DE JANEIRO, BRAZIL – The dollar closed Wednesday, October 28th, traded at R$5,7599, an increase of 1,31 percent. Earlier, it had hit R$5.7900, its highest in a single session since May 18th (R$5.8025). At its minimum, it reached R$5,7025. The tourism exchange rate hit R$6,0186.
On the partial month so farl, the dollar has accumulated an increase of 2.52 percent. On the year, it has appreciated 43.65 percent.
The hike lost momentum following Central Bank intervention, which sold US$1.042 billion in a cash auction on the day of the Monetary Policy Committee (COPOM) meeting on the country’s basic interest rate.
The market experienced a tense day due to news from Europe, where a new wave of Covid-19 contagion is spreading. On Wednesday, October 28th, France and Germany announced that they will once again close bars and restaurants. A new global economic shutdown is feared.
In turn, the BOVESPA stock market index fell by 4.25 percent, to 95,368 points, with Covid-19 spreading and pessimism over the global economy. It was its worst rating since October 2nd.
Abroad, the increase in coronavirus cases raised concerns that lockdowns in Europe would jeopardize economic rebound. Uncertainties regarding the U.S. elections also weighed heavily.
“Global markets seem to be incredibly nervous; the combination of the upsurge in Covid-19 cases and deaths and the potential lockdown in France add to the uncertainty before the U.S. elections and there is this very fragile background,” said John Woolfitt, trading director of Atlantic Capital Markets.
In Brazil, the Central Bank’s Monetary Policy Committee (COPOM) announced the new basic interest rate on Wednesday, at around 6 PM, and the financial market expects that the Selic will be maintained at two percent, despite the pressure from soaring food prices.
Increased concerns about the country’s fiscal situation and the sustainability of public accounts, in addition to the government’s ability to progress on a reform agenda, continue to hold investors’ attention, being pointed out as the main pressure factors on the Brazilian real.
Interest rates at historical lows also reduce Brazil’s attractiveness to international investors because of the differential in interest rates when compared to other economies, reducing the flow of dollars for financial investments in the country, which also contributes to a higher exchange rate.
“Global moods are sharply deteriorating with generalized drops and flight to liquidity and security,” assessed Necton economist André Perfeito, who projects an exchange rate of R$6 by the end of the year. “The Central Bank can intervene in the market, but as we have argued several times, the only thing this will do is to give the market an outlet and thus mitigate volatility,” he added.
Source: G1
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Live Market IntelligenceBrazil — Live Market Board
Rio Times · Live Market Intelligence
Brazil — Live Market Board
+0.42%
172,060.43
+0.42%
72,006.05
+0.16%
10,552.02
-0.43%
2,848,945
—
2,486.39
-1.65%
| Instrument | Last | Change | YoY | Prev. | High | Low | Volume |
|---|---|---|---|---|---|---|---|
| IBOV | 172,060.43 | +0.42% | +9.07% | 171,336.99 | — | — | — |
| USD/BRL | 5.58 | -0.01% | +5.91% | 5.58 | 5.59 | 5.58 | — |
| SELIC | 13.75% | — | — | — | — | — | |
| PETR4 | 43.55 | -3.11% | +31.17% | 44.95 | 44.52 | 43.30 | 65,089,600 |
| VALE3 | 64.43 | -0.57% | -0.94% | 64.80 | 65.47 | 64.16 | 12,171,000 |
| ITUB4 | 41.72 | +1.26% | +4.25% | 41.20 | 42.09 | 41.55 | 19,415,700 |
| BBDC4 | 14.33 | -1.44% | -26.48% | 14.54 | 14.82 | 14.33 | 45,613,900 |
| BBAS3 | 16.89 | -1.23% | -28.04% | 17.10 | 17.31 | 16.89 | 29,418,100 |
| B3SA3 | 14.80 | +2.21% | +9.39% | 14.48 | 14.92 | 14.59 | 40,245,900 |
| ABEV3 | 15.85 | +0.38% | +16.63% | 15.79 | 15.88 | 15.74 | 21,260,300 |
| WEGE3 | 51.61 | +1.30% | +12.12% | 50.95 | 52.00 | 50.95 | 9,826,200 |
| PRIO3 | 61.47 | +2.42% | +52.53% | 60.02 | 61.99 | 60.50 | 18,937,900 |
| SUZB3 | 53.80 | -1.21% | +15.57% | 54.46 | 54.64 | 53.71 | 7,203,500 |
| RENT3 | 30.24 | +1.51% | -30.08% | 29.79 | 30.77 | 29.93 | 8,008,800 |
| AZZA3 | 15.37 | +4.34% | -46.54% | 14.73 | 15.45 | 14.74 | 3,535,400 |
| CSNA3 | 4.52 | +3.20% | -45.61% | 4.38 | 4.52 | 4.38 | 15,203,500 |
| GGBR4 | 25.25 | -2.25% | +33.60% | 25.83 | 25.81 | 24.98 | 5,425,100 |
| ENEV3 | 27.38 | +1.22% | +41.94% | 27.05 | 27.66 | 27.05 | 7,114,000 |
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