Dollar operates at a low, in anticipation of the direction of interest rates in the USA and with Brazil’s fiscal target on the radar; Ibovespa rises

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Last Friday (17), the North American currency advanced 0.76%, quoted at R$4.9064. Ibovespa, the main stock index on the Brazilian stock exchange, rose 0.11%, to 124,773 points. Markets operate with lower volume this Monday Burak The Weekender/Pexels The dollar operates lower this Monday (20), a day with lower trading volume in the Brazilian market due to Black Awareness Day, which is a holiday in six states. Investors are waiting for the release of the minutes of the last meeting of the Federal Reserve (Fed, the American central bank), which takes place tomorrow. The minutes should provide a clearer indication of the institution’s next steps in relation to interest rates in the United States, currently between 5.25% and 5.50% per year. In Brazil, the only highlight on the agenda is the traditional Focus Bulletin, a report from the Central Bank (BC) that brings together financial market projections for the country’s main economic indicators. In this edition, economists reduced inflation expectations in 2023 from 4.59% to 4.55%. The political agenda is also on the radar, mainly in relation to the fiscal target for 2024. Ibovespa, the main stock index of the Brazilian stock exchange, B3, operates on an increase driven by the shares of Vale, a company with the greatest weight in the composition of the index. . See the day in the markets below. Understand what makes the dollar rise or fall Dollar At 11:50 am, the dollar fell 0.64%, quoted at R$4.8752. See more quotes. Last Friday (17), the North American currency closed up 0.76%, sold at R$4.9064. As a result, it began to accumulate falls of: 0.16% in the week; 2.66% in the month; 7.04% in the year. Ibovespa At 11:50 am, Ibovespa rose 0.48%, to 125,373 points. At the same time, Vale’s shares rose more than 2.60%, following the appreciation of iron ore in international markets. On Friday, the index closed up 0.11%, at 124,773 points, but reached 125,431 points throughout the session. As a result, it began to accumulate increases of: 3.49% in the week; 10.28% in the month; 13.70% in the year. MONEY OR CARD? What is the best way to take dollars when traveling? DOLLAR: When is the best time to buy the currency? What’s moving the markets? It’s a slow day in Brazil due to the holiday, but investors continue to reflect expectations about the direction of interest rates in the United States. After weaker inflation data last week, the market began to take for granted that the cycle of rising US rates has reached a peak and that the Fed could start cuts in the first half of 2024. This view pleases investors and It benefits risky assets – including the real and the Brazilian stock exchange – because the profitability of American public bonds, considered the safest in the world, are directly related to the Fed’s interest rates. Thus, with lower interest rates, bond yields also fall, increasing the appetite for other assets. Now, what the market is waiting for is the release of the Fed’s minutes to find out exactly what was discussed at the institution’s last meeting, when interest rates were maintained between 5.25% and 5.50% per year. The hope is that the document will make clearer what the directors of the American central bank think. Furthermore, the week also has a busier schedule in the rest of the world, as Thursday is the Thanksgiving holiday in the United States and the markets are not open. In Brazil, the Focus Bulletin showed a reduction in inflation estimates for 2023, but did not bring any other major changes. Regarding the result of the Gross Domestic Product (GDP) for 2023, the financial market reduced the growth projection from 2.89% to 2.85%. On the political scene, attention is focused on discussions about the fiscal target, which Finance Minister Fernando Haddad is fighting to keep at zero for next year. Experts believe that, if the government agrees to keep the target at zero, it should take other steps in the National Congress to increase federal revenue, such as taxing sports betting, for example.

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