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Dollar closes higher on external deterioration and fiscal fears

The dollar closed higher on Tuesday (28), reflecting deteriorating sentiment in international markets and lingering domestic fiscal fears.

The US currency rose 0.60%, selling at R$5.2649. At the peak of the session, it reached R$ 5.2790. At a minimum, it was R$5.1881. See more quotes. This is the highest closing level since February 4 (R$5.3206)

The Ibovespa has closed its doors.

On Monday, the dollar closed 0.37% lower at R$5.2334. With the result on Tuesday, began to accumulate a high of 10.80% during the month. Within the year it still has a devaluation of 5.56% against the real.

Understand what makes the dollar go up or down

What disturbs the markets?

In a sign of deteriorating global risk appetite, major Wall Street indices traded in the red on Tuesday after U.S. consumer confidence data revived fears of a recession in the greater economy of the world.

The Conference Board’s consumer confidence index fell 4.5 points to 98.7, the lowest since February 2021, as inflation concerns led Americans to anticipate a significant slowdown in the economy or even a recession in the second half.

At the start of the session, good mood prevailed in international markets after China relaxed its quarantine rules and with the announcement that G7 leaders had agreed to study the introduction of price caps on Russian oil and gas imports.

On the agenda for the day, the Ministry of Labor and Social Security announced that Brazil generated 277,000 formal jobs in May this year, compared to 197,400 in April.

The day before, Central Bank President Roberto Campos Neto said that the worst moment for inflation in Brazil had passed, noting that the country was close to completing all the work of raising interest rates for tame rising prices. Two weeks ago, the Central Bank raised the Selic rate by 0.5 percentage points, to 13.25% per annum, and said it expected a further adjustment, of equal or lesser magnitude, when the August meeting.

Among the domestic uncertainties likely to affect markets, analysts cite the resurgence of fiscal risk amid proposals to increase government spending on the eve of the election.

Local tax fears have deepened since Senator Fernando Bezerra Coelho (MDB-PE), rapporteur for the so-called PEC on fuels, said that the text will include in the Federal Constitution a 200 reais increase in the value of fuel. ‘Auxílio Brasil, a readjustment of the gas aid around R$ 70 and the creation of a “trucker voucher” for R$ 1,000.

  • Country risk increases more in Brazil than in other Latin American countries

FGV: Brazilians will use extra money to pay debts and save

FGV: Brazilians will use extra money to pay debts and save

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