Dollar falls with Tax Reform; see quote today – 07/07/2023 – Market

The dollar opened in decline this Friday (7) after a session marked by aversion to global risk and by market fears about the postponement of economic agendas in Brazil, which made the American currency soar. The market monitors US employment data.

Investors echo the approval of the tax reform, which unifies five taxes on consumption, in the Chamber. The text was approved in the second round this morning with 375 votes in favor and 113 against.

At 9:04 am (Brasília time), the spot dollar retreated 0.35%, to R$ 4.9130 in the sale. On B3, at 9:04 am (Brasília time), the first contract dollar futures contract fell 0.13%, to R$ 4.9355.

The Brazilian stock exchange had a strong drop of 1.77% and closed at 117,425 points this Thursday (6) pulled by the outside world, in an environment of risk aversion with forecasts of new interest rate hikes in the United States this year. The processing of the tax reform in Congress was also on investors’ radar.

The dollar, on the other hand, had a new high, supported precisely by the expectation of tightening interest rates, which would favor the American currency. The currency ended the day with an appreciation of 1.64%, quoted at R$ 4.93.

Abroad, US indices fell sharply. The Dow Jones, S&P 500 and Nasdaq all fell 1.07%, 0.79% and 0.82% respectively.

The poor performance of US markets impacted Brazilian assets, and the negative environment was reinforced by concerns about tax reform in Congress.

As a result, the Ibovespa had a sharp drop. All the most traded shares in the session had a negative performance, including Petrobras and Vale, the largest on the Exchange, which fell 1.59% and 0.64%, respectively.

The list of most traded shares completed the shares of Itaú, Bradesco and B3, which had losses of 1.24%, 2.23% and 3.80%, respectively.

The futures interest rates markets rose for the third consecutive day. Contracts maturing in January 2024 rose from 12.80% to 12.83%, while those for 2025 rose from 10.76% to 10.80%.

In the exchange rate, the dollar rose mainly driven by the possible postponement of other economic matters to the detriment of the advance of the tax reform.

Despite the appreciation in Brazil, the dollar fell against other strong currencies abroad, with the DXY index, which measures the performance of the American currency against these currencies, falling 0.24%.

With Reuters