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Dollar drops to R$5.14 with inflows into the country

Dollar slows down and closes at R$ 5.57 after PEC discussion is postponed

In a day of euphoria in the financial market, the dollar fell to the third lowest price of the year with the increase in the entry of external flows into the country. The stock exchange closed at the highest level in more than two months, pulled by shares of retail companies.

The commercial dollar ended this Tuesday (24) sold at R$5.143, down R$0.057 (-1.1%). The quotation even opened higher, at R$5.21, but reversed the movement in the first minutes of trading and fell during the rest of the day. With the increase in foreign capital inflows and the fall of the US currency abroad, the dollar began to operate below R$ 5.15 near the end of negotiations.

The currency is at the third lowest value of the year, second only to a few days two weeks ago, when it closed at around R$5.10. The US currency accumulates a drop of 1.1% in 2023.

The stock market had a day of gains and recovered after two days of declines. The B3 Ibovespa index closed at 113,028 points, up 1.16%. Despite the retreat in shares of mining and oil companies, harmed by the fall in commodities (primary goods with international quotation), the indicator advanced driven by shares of companies linked to retail.

The Brazilian stock market is at its highest level since November 14th. Investors took advantage of the fall of some stocks in recent days to acquire cheaper shares.

Several factors influenced the fall of the dollar and the rise of the stock market. In Brazil, the disclosure of the official inflation preview was well received by investors. The Extended Consumer Price Index-15 (IPCA-15) closed January at 0.55%. Although the indicator has risen, mainly because of food, service inflation is starting to ease.

Abroad, expectations prevailed again that the Federal Reserve (Fed, US Central Bank) will slow down interest rate hikes and readjust US basic rates by 0.25 percentage points at next week’s meeting. A smaller readjustment favors emerging countries, such as Brazil.

*With information from Reuters

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