Follow the dollar rate and the Stock Exchange today – 05/22/2023 – Market

The dollar records fall in the early afternoon of this Monday (22) amid discussions about the debt ceiling in the United States. Negotiations between the US government and republicans have been paused since Friday, and investors are waiting for the theme to be resumed.

The Brazilian Stock Exchange oscillates and operated in a slight fall pressured by shares of Vale and Petrobras.

At 1:40 pm, the dollar fell 0.60%, at R$ 4.966. The Ibovespa was down 0.18%, at 110,541.32 points

US President Joe Biden is due to meet again with Republican leader Kevin McCarthy this Monday to resume debates on the American debt limit. Despite the fears, the expectation is that an agreement will be closed.

There are less than two weeks to go before the June 1 deadline, after which the Treasury Department has warned that the federal government will struggle to pay its debts, triggering a default that would wreak havoc on financial markets and drive up interest rates.

With that, the American currency had a drop against the real, after having closed with gains last week. The DXY index, however, which measures the performance of the dollar against other strong currencies, had a slight increase of 0.09%, remaining practically stable.

The US stock indices have different movements. While the Dow was down 0.30%, the S&P 500 and Nasdaq were up 0.14% and 0.48%, respectively.

In Brazil, the Ibovespa had fallen driven by Vale shares, which fell 1.54% with the decline in iron ore futures contracts.

Petrobras also registered low, with a drop of 1.80% in common shares and 1.50% in preferred shares. On Monday, Fitch said that the oil company’s new pricing policy underscores its political vulnerability.

Pressure was also placed on the Exchange by a 1.15% drop in Itaú shares, which were among the most traded in the session.

On the other hand, Alpargatas had the biggest increase in the trading session, rising 15.84% after its controllers announced an offer to purchase up to 32 million shares of the owner of the Havaianas brand at R$ 10.50 each.

Altas de Azul (11.15%), Magalu (5.49%) and Localiza (1.25%) also supported the index.

This Monday, the Focus bulletin, from the Central Bank, showed a sharp decrease in inflation projections for this year. The forecast for the accumulated IPCA until December fell to 5.80%, a decrease of 0.22 percentage points in relation to the previous edition.

Future interest rates, however, rose. Contracts maturing in January 2024 rose from 11.30% to 11.31%, while those for 2025 rose from 11.70% to 11.75%.

In the opposite direction, the projection for GDP (Gross Domestic Product) growth improved, advancing from 1.02% to 1.20% since the last publication. The adjustment comes after the release of the IBC-Br, which grew more than expected in the last week.

Brazilian investors are still following the course of the fiscal framework in Congress. The text should be voted on this week, and the expectation is that the approval of the new fiscal rules will reduce the perception of risk in the country.

(With Reuters)