Dollar drops to BRL 5.12 after Fed minutes release

Dollar touches R$5.50 after interest rate hikes in the euro zone

In another day of domestic and external tensions, the dollar approached R$5.50 and closed at the highest level in six months. The stock market rose for the fifth time in a row, supported by the recovery of US stocks.Dollar touches R$5.50 after interest rate hikes in the euro zone

The commercial dollar ended this Thursday (21) sold at R$5.496, up by R$0.036 (+0.65%). The price even dropped in the first hour of trading, reaching R$ 5.43 at the lowest of the day, just before 10 am. However, it skyrocketed after the European Central Bank (ECB) raise eurozone interest rates by 0.5 percentage point, the first increase in 11 years.

The decision of the ECB and the expectation with the meeting of the Federal Reserve (Fed, North American Central Bank), next week, stimulated the flight of capital from emerging countries, such as Brazil, putting pressure on local currencies. The dollar is at its highest level since January 24, when it closed at R$5.50, and is just 1.4% below the rate recorded at the end of 2021.

The commercial euro, which in recent days had been falling against the dollar, rose 1.04% as interest rates increased by the ECB. The currency closed this Thursday sold at R$ 5.615 and is at its highest value since March 16, when it was at R$ 5.62.

Stock Exchange

In the stock market, the day was more optimistic. The B3 Ibovespa index closed the day at 99,033 points, up 0.76%. The indicator now accumulates a rise of 0.5% in July, but still drops 5.5% in 2022.

Exchanges in Brazil and the United States have reacted in recent days, amid the release of quarterly balance sheets of companies. Recent drops have left some stocks very cheap, which has spurred investor interest in the stock and helped the indexes recover.

*With information from Reuters

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