Dollar falls on US holiday; see quote today – 07/04/2023 – Market

The dollar opened in decline this Tuesday (4) after registering a day of gains the day before, supported by expectations of a fall in the Selic disclosed by the Focus bulletin.

Despite the high on Monday (3), the American currency should follow a downward trend in Brazil even in a scenario of interest rate cuts, experts say. They cite the improvement in Brazil’s economic environment, which would attract resources, and the decrease in inflation, which would increase real interest rates, as the main factors for the probable gain in strength of the real against the dollar in the coming months.

At 9:05 am (Brasília time), the spot dollar retreated 0.25%, to R$ 4.7948 in the sale. On B3, at 9:05 am (Brasília time), the first contract dollar futures contract fell 0.25%, to R$ 4.8185.

This Tuesday, the performance of the American currency should be impacted by the low global financial volume due to the Independence holiday in the United States.

The Brazilian stock exchange rose again on Monday and closed at a high of 1.34%, to 119,672 points, supported by the improvement in inflation expectations and cuts for the Selic (basic interest rate) of Focus.

The dollar also rose after closing the semester with its biggest devaluation since 2016. The American currency ended the day with a gain of 0.37%, quoted at R$ 4.806.

the Focus bulletin showed that the market reduced its projection for Brazilian inflation this year to 4.98%, compared to 5.06% in the previous survey. In addition, analysts consulted by BC now see the Selic at 12.00% at the end of 2023, from 12.25% previously projected.

After the release of the Focus, future interest rates, which are already at the lowest levels of the year, registered another drop. Contracts maturing in January 2024 rose from 12.84% to 12.78%, while those from 2025 fell from 10.77% to 10.64%.

The biggest rise of the day was from Locaweb (3.96%), which is undergoing correction after having accumulated a strong drop last week. The company’s shares also entered the portfolio of weekly recommendations by BB Investimentos, which offered additional impetus.

Steelmakers Gerdau and Usiminas registered a strong rise, with gains of 3.80% and 2.68%, respectively. The sector was supported by a request by the Tangshan government, China’s biggest steel hub, for local companies to reduce steel output as part of efforts to improve air quality.

Petrobras was also high, with its preferred shares rising 1.86% after a sharp drop on Friday (30).

More linked to the domestic economy and sensitive to interest projections, the “small caps” supported the rise of the Ibovespa, with the index that gathers these companies registering an increase of 0.69%.

In the United States, the stock indices had a slight rise in activity reduced by the American Independence holiday, which takes place on Tuesday (4). On Monday, financial market operations closed at 1 pm.

With Reuters