The rollback of the UK tax cuts package has given the global market a day of relief. The dollar fell, following the recovery of appetite for greater risk among international investors. The stock market rose for the first time after five straight drops.
The commercial dollar ended this Monday (17) sold at R$ 5.303, with a decrease of R$ 0.02 (-0.37%). The currency started the day sharply lower, dropping to R$5.25 around 1:00 pm, but the fall lost strength, with the maintenance of interest concerns in the United States.
With today’s performance, the US currency dropped 1.71% in October. In 2022, the currency accumulates a low of 4.89%.
In the stock market, the day was marked by recovery. The B3 Ibovespa index closed at 113,624 points, up 1.38%. The indicator took advantage of the recovery climate in the international market and was also boosted by a movement of investors who took advantage of the recent falls in the stock market to buy shares.
The decision by the UK’s new finance minister, Jeremy Hunt, to roll back virtually all tax cuts announced three weeks ago by Prime Minister Liz Truss has been welcomed by international investors. With no counterparts to be financed, such as cuts in public spending or increases in other taxes, the cuts would raise the British public debt, causing tensions in the global market.
In the afternoon, however, fears rekindled that the Federal Reserve (Fed, US Central Bank) will keep US interest rates high for longer than expected to curb US inflation. Higher interest rates in advanced economies encourage capital flight from emerging countries such as Brazil. This put pressure on the dollar against the real, but not fast enough to reverse the accumulated decline until early afternoon.
*With information from Reuters
