Dollar rises 0.85%, to BRL 4.97, and Ibovespa falls 0.4% with Budget and China on the radar

Dollar

The spot dollar closed the day quoted at R$4.976 on sale, up 0.85%

The Ibovespa closed down this Tuesday (5), with persistent distrust of the federal government’s ability to reach its fiscal targets putting downward pressure.

The main stock index of the Brazilian stock exchange fell -0.38% and ended the day at 117,331.3 points.

The spot dollar closed the day quoted at R$4.976 on sale, up 0.85%.

The release of weak economic data in China and the euro zone raised concerns about global growth and triggered the global search for lower risk assets, such as the dollar, at the expense of riskier assets, such as currencies linked to commodities. As a result, the spot dollar rose throughout the day in Brazil.

According to the Mirae Asset team, the “fiscal drama” is still on the radar of investors in the Brazilian market. “The account does not close on the government’s fiscal adjustment only for revenues. And that has only generated criticism,” they said.

Presented last week, the 2024 Budget forecasts a primary surplus of BRL 2.8 billion next year, a balance that includes revenues of BRL 168.5 billion from new collection actions proposed in recent months, including measures not yet approved.

In China, one of the world’s biggest importers of commodities, the Purchasing Managers’ Index (PMI) for services fell to 51.8 in August, from 54.1 in July, the lowest reading since December, when Covid-19 confined many Chinese to their homes. The 50 mark separates activity expansion from contraction.

The purchasing indexes (PMIs) of the euro zone, which measure the level of consumption, showed a deeper retraction than expected in August.

*With advisory information

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