Dollar operates on the rise, with the market eyeing Brasília and waiting for the Fed; Ibovespa falls

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The previous day, the North American currency fell 1.11%, quoted at R$4.8517. The main stock index on the Brazilian stock exchange, rose 0.95%, to 125,957 points. Dollar banknotes bearfotos/Freepik The dollar is rising this Tuesday (21), with the market keeping an eye on Brasília. Today, the start of the analysis of two proposals that make up the economic package of President Luiz Inácio Lula da Silva’s government is scheduled to increase federal revenue in 2024, in order to try to maintain the fiscal target at zero. Investors are also waiting for the release of the minutes of the last meeting of the Federal Reserve (Fed, the American central bank), which chose to maintain interest rates in the United States between 5.25% and 5.50% per year. Ibovespa, the main stock index on the Brazilian stock exchange, B3, is falling. See the day in the markets below. Understand what makes the dollar rise or fall Dollar At 10:20 am, the dollar rose 0.54%, quoted at R$4.8779. See more quotes. The previous day, the North American currency closed down 1.11%, sold at R$4.8517. With the result, it started to accumulate: drop of 1.11% in the week; decline of 3.75% in the month; drop of 8.08% in the year. Ibovespa At 10:20 am, Ibovespa fell 0.22%, to 125,684 points. The day before, the index closed up 0.95% and rose to 125,957 points, the highest level since July 2021. As a result, it began to accumulate: up 0.95% in the week; gain of 11.32% in the month; increase of 14.78% 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? On a day with an empty economic agenda, the market pays attention to the development of the government’s economic agenda in the National Congress. These two proposals – one that deals with the regulation of the online sports betting market and the other that establishes rules for the taxation of offshores (investments abroad) and investment funds exclusive to high-income people – seek to increase the government’s federal revenue. The texts have already been approved by the Chamber of Deputies and will now be analyzed in the Federal Senate. The proposals are important for the government to be able to maintain the fiscal target at zero next year and, therefore, gain prominence among investors and analysts. Investors also continue to expect 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, the yield on bonds also falls, 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.

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