Dollar opens lower with pessimism about China and waiting for inflation data in Brazil and the USA

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Last Friday, Ibovespa fell 0.43%, to 128,340 points, driven by Petrobras. The North American currency rose 0.97%, quoted at R$4.9816. Dollar banknotes bearfotos/Freepik The dollar opened higher this Monday (11), following pessimism from abroad with China’s demand for iron ore, which has been falling and impacting the price of the commodity and several stocks around the world . The market is also awaiting the release of inflation data in Brazil and the United States tomorrow, looking for new signals about interest rates in both countries. See below for a summary of the markets. Dollar At 9:20 am, the dollar rose 0.20%, quoted at R$4.9917. See more quotes. Last Friday (8), the North American currency rose 0.97%, quoted at R$4.9816. With the result, it accumulated: increase of 0.54% in the week; gain of 0.19% in the month; and an increase of 2.66% in the year. Ibovespa Ibovespa starts operating at 10am. On Friday, the index fell 0.99%, to 127,071 points. With the result, it accumulated: drop of 1.63% in the week; decline of 1.51% in the month; and a drop of 5.30% in the year. Understand what makes the dollar rise or fall CASH OR CARD? What is the best way to take dollars when traveling? DOLLAR: When is the best time to buy the currency? What is changing the market? The highlight of this session are the concerns coming from China, with the drop in demand for iron ore amid weaker activity in the world’s second largest economy. As it is one of the main consumers of the commodity, when demand for the product falls in China, the tendency is for the price of iron ore to go through a devaluation around the world – which is happening today, with a drop of around of 7%. This drop in prices directly impacts companies that export the commodity, such as Vale, the company with the greatest weight in the composition of the Ibovespa. Thus, the entire Brazilian stock market is also affected. On the other hand, still in China, a piece of information helps to alleviate investors’ pessimism: after months of decline, the country’s consumer inflation rose again and registered an increase of 0.7% in February. This raises the expectation that the economy may be experiencing a recovery, as the increase in prices is related to the increase in consumption among the population. Inflation is also the main theme of the week in Brazil and the United States, which release their price indices to consumers this Tuesday (12). With these numbers, the market hopes to have a clearer vision of what the next steps will be for the central banks of both countries. In Brazil, the BC’s Monetary Policy Committee (Copom) has been following a cycle of cuts in the Selic, the basic interest rate, in a scenario of more controlled inflation and within targets. Currently, the Selic rate is 11.25% per year. In the United States, the market still has many doubts about when the Federal Reserve (Fed, the American central bank) should start its interest rate cuts, currently between 5.25% and 5.50% per year. Throughout the week, other data will be released, such as producer inflation and the consumer confidence index in the United States. Furthermore, in Brazil, today President Lula talks with the president of Petrobras, Jean Paul Prates, and the market awaits new signals about the oil company. Last Friday, the company’s shares plummeted after the dividend payment announcement disappointed investors.

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