Dollar remains below R$ 5 today; see quotation – 04/17/2023 – Market

The dollar had little change shortly after opening this Monday (17), after losing more than losing almost 3% of its value against the real last week. Investors monitor expectations about the Fed’s (Federal Reserve) monetary policy next steps and await the presentation of the fiscal framework to the Brazilian Congress.

This week is shorter in Brazil, with the Tiradentes holiday next Friday (21). Until then, some important events and indicators will remain in the sights of investors.

At 9:09 am (Brasília time), the spot commercial dollar retreated 0.14%, to R$ 4.9095 in the sale.

This Monday, in addition to the Focus bulletin, the BC (Central Bank) also releases its economic activity index, the IBC-BR. At 23:00 (Brasília time), China’s GDP (Gross Domestic Product) for the first quarter of 2023 will be released, an indicator much expected by the market.

For the rest of the week, the highlight is the consumer inflation index in the Euro Zone, and the Beige Book, a document from the Fed (Federal Reserve, the US central bank) that deals with the economic environment in the United States and may give signals about interest rates . Both leave next Wednesday (19).

The Stock Exchange closed lower this Friday (14), but at a lower intensity than it had tried during the day. In the week, the Ibovespa accumulated an increase, driven mainly by the March inflation data, which came in below expectations, and raised expectations for the beginning of the BC (Central Bank) interest rate cut cycle.

The dollar also fell on Friday, confirming the week’s trend. The exchange rate was more influenced by the economic scenario in the United States, with indicators showing a slowdown in the economy and inflation in the country.

The Ibovespa closed this Friday at a low of 0.17%, at 106,279 points. In the week, the index accumulated advance of 5.4%. The spot commercial dollar ended the day with a fall of 0.22%, at R$4.916, and in the week, the retreat was of 2.8%.

In futures markets, interest rates are high. In contracts for January 2024, rates rose from 13.16% at the close of this Thursday (13) to 13.19%. For January 2025, interest rates increased from 11.77% to 11.85%. Upon maturity in January 2027, the rate changes from 11.64% to 11.69%.

According to analysts, investors continued this Friday a movement already seen on the eve, of taking profits. The Stock Exchange also followed the trend seen in New York, where stock indices closed lower.

Regarding the dollar, the week marked the return of the quotation to below R$ 5, something that had not happened since June of last year in daily closings.

In the United States, the day was for the release of retail indicators in March, and the beginning of the harvest of balance sheets for the first quarter of 2023 for the large banks. The numbers already have the impacts of the failures of regional banks in the country.

US retail sales fell more than expected in March as consumers cut back on purchases of motor vehicles and other big-ticket items. The numbers suggest that the economy lost steam at the end of the first quarter because of higher interest rates.

Retail sales fell 1.0% last month, the Commerce Department said on Friday. February data was revised to show a 0.2% decline instead of a previously reported 0.4% decrease.

Economists polled by Reuters had forecast a 0.4% drop in sales in March, with estimates ranging from a 0.3% gain to a 1.5% drop.

Among the banks, JPMorgan, Citigroup and Wells Fargo announced their figures for January through March this year on Friday. The results came better than expected.

The Bloomberg agency shows that the net financial margin of the three banks in credit operations continued to grow between January and March, both in relation to the same period of 2022 and to the immediately previous quarter.

The market’s positive surprise appears mainly in shares of JPMorgan and Citigroup in New York, which rose 7.5% and 4.8%, respectively.

Stock indices, on the other hand, closed lower, with investors putting an end to the expectation that the banking crisis could ease the Fed’s high interest rate policy (Federal Reserve, the US central bank) in asset prices. The market is already starting to see an increase in interest rates at the meeting on interest rates in June, in addition to the one already expected in May.

The Dow Jones ended the day down 0.42%. S&P 500 and Nasdaq fell 0.21% and 0.35%, respectively.

In Brazil, the service sector stands out, which registered a sharp contraction in volume in January, starting the year on a negative note after reaching the highest point in the historical series in December, in a scenario of challenges with the increase in interest rates and the loss strength of the global economy.

In January, the volume of services in the country fell by 3.1% compared to the previous month, the IBGE (Brazilian Institute of Geography and Statistics) reported this Friday, the highest negative rate since March 2021, the period of the second wave of Covid-19, and the worst result for the month in the series, which started in 2011.

In comparison with the same month of the previous year, however, there was expansion of 6.1%.