In another day of strong flow of funds to emerging countries, the dollar fell again and closed below R$ 5.40 for the first time in four months. Benefiting from recent rallies, the stock market had a profit-taking day as investors sell stocks to pocket recent gains, but it racked up a third straight week of gains.
The commercial dollar ended this Friday (28) sold at R$ 5.39, with a decrease of R$ 0.034. The price operated in decline throughout the session. At the lowest of the day, around 10:40 am, it reached R$ 5.38.
With today’s performance, the US currency closed the week down 1.2% and accumulated a drop of 3.31% in January. The currency is at its lowest since October 1, 2021.
The stock market had a day of less optimism. The B3 Ibovespa index closed at 111,910 points, down 0.62%. The indicator even operated higher in the initial minutes of trading, but started to fall, in a correction movement after three consecutive days of gains.
The Ibovespa did not follow the North American stock exchanges, which closed higher after days of decline. Despite today’s drop, the Brazilian stock market ended the week up 2.72%. In January, gains reached 6.76%.
The expectation with the next meeting of the Monetary Policy Committee (Copom) of the Central Bank, which will take place next week, helped to hold the dollar. Although the Federal Reserve (US Central Bank) has confirmed that it will raise US base rates in March, the estimate that the Brazilian Central Bank will increase the Selic rate (the economy’s basic interest rates) to double digits indicates that Brazil is reacting faster than other emerging countries.
Another factor that helped keep the dollar lower this week was the understanding on the part of investors that the effects of monetary tightening in the United States on emerging countries are already priced in (incorporated into asset prices).
*With information from Reuters
