On a day of tension in the financial market, the dollar surpassed the R$5.60 barrier and closed at its highest value in a month. The stock exchange reversed Thursday’s rise (10) and accumulated a decline of more than 1% for the week.
The commercial dollar ended this Friday (11) sold at R$ 5.615, an increase of R$ 0.027 (+0.5%). The price started low, but started to rise after an interview in which President Luiz Inácio Lula da Silva announced the possibility of increase the Income Tax exemption range in addition to R$5,000 in exchange for taxing the super-rich.
At the day’s high, around 10:55 am, the US currency reached R$5.65. The currency is at its highest price since September 12th. During the week, the dollar accumulated an increase of 0.36%.
In the stock market, the day was also tense. B3’s Ibovespa index closed at 129,992 points, down 0.28%. The indicator fell 0.78% shortly before 11 am, but the pace of decline slowed because mining shares rose with the expectation of economic stimulus announcements by the Chinese government, a major consumer of Brazilian metals. During the week, the Ibovespa fell 1.37%.
Both the dollar and the stock market went against the international financial market. The dollar fell against the main currencies of emerging countries, and the North American stock market rose, after the announcement that producer inflation in the United States was stable in September, below expectations.
However, President Lula’s statements about the Income Tax exemption table were poorly received. Although the president said that increasing the exemption range would be funded by taxing the super-rich, in line with what happens in several countries, investors expressed distrust in Congress’s ability to approve an increase in taxes to provide resources for fulfill the government’s campaign promise.
*With information from Reuters
