Follow the dollar rate and the stock market today (1st) – 03/01/2024 – Market

The Brazilian Stock Exchange operated slightly higher this Friday morning (1st), recovering after two consecutive sessions of negative performance. Petrobras, which is also recovering, is the main gainer of the day, and Gerdau was the most traded stock on the floor.

On the negative side, Vale, the company with the largest weight on the Ibovespa, retreated, following the weakness of iron ore abroad. This week, the mining company suffered criticism from President Luiz Inácio Lula da Silva (PT), which was seen internally as a threat from the chief executive to regain power.

Regarding the exchange rate, the dollar recorded a slight drop, but operated close to stability, still under the effect of the new inflation figures in the United States released on Thursday (29).

At 10:57 am, the Ibovespa fell 0.23%, to 129,322 points, while the dollar fell 0.13%, quoted at R$4.966.

According to Fernando Bergallo, director of operations at FB Capital, this Friday’s exchange rate movement partly reflects “a generalized adjustment of the dollar against emerging (currencies), also due to a technical adjustment due to the moderate rise in February”.

Last month, the dollar rose 0.7% against the real and 0.6% against a basket of strong peers, largely supported by the postponement of bets on when the Federal Reserve will start cutting its interest rate.

Some market participants feared that yesterday’s US inflation data could surprise to the upside and further delay traders’ projection for the start of monetary easing, but the PCE price index reading came in line with expectations, which kept bets for a first rate cut in June. According to some financial agents, this contributed to the weakness of the dollar in this session.

For Bergallo, the fall in Treasury yields also weighed on the dollar this Friday.

Meanwhile, the local market was digesting IBGE data this morning that showed stagnation in the economy in the fourth quarter, but growth of 2.9% in 2023 as a whole. According to Bergallo, this reading should not have a major impact on financial markets, as it was not far from market and official expectations.

Both the government and the Central Bank expected expansion of 3.0% last year as a whole, while the expectation in a Reuters survey was for an increase of 0.1% on a monthly basis.

With Reuters