Follow the dollar rate today – 05/24/2023 – Market
The dollar opened in decline this Wednesday (24) after the approval of the basic text of the fiscal framework in the Chamber of Deputies.
The impasse over the debt ceiling in the United States, however, still generates caution and maintains the demand for security in the world, while investors are still waiting for the minutes of the Fed (Federal Reserve, the American central bank).
At 9:03 am, the dollar retreated 0.38%, to R$ 4.953.
The basic text of the new fiscal rule was approved by 372 votes to 108 in the Chamber, in a broad victory for the government of Luiz Inácio Lula da Silva (PT). Investors have been following the project through Congress with optimism since last week, as the new framework can improve risk perception and the country’s business environment.
This is because, with a plan to contain the public debt, the tendency is for creditors to charge lower interest rates to lend money, boosting financing and, consequently, economic growth.
Thus, the perspective of growth motivates investors to bring resources to the country.
The text continues in the House for the vote on the highlights, which should take place this Wednesday. Then it will go to the Senate.
On Monday (23), the dollar closed stable at R$ 4.971 and the Brazilian stock market fell driven by Vale shares.
The Ibovespa fell 0.25%, to 109,928.53 points, closing below the level of 110 thousand points.
The declines of Marfrig and BRF weighed against the Ibovespa, which were among the biggest falls of the session with the decree of the state of animal health emergency throughout Brazil by the Ministry of Agriculture. The measure was taken after confirmation of cases of avian flu in wild birds in the country.
At the other end, Petrobras closed in the positive and mitigated the fall of the Stock Exchange. The oil company registered a rise of 2.25% in common shares and 2.57% in preferred shares amid rising oil prices abroad.
The Brazilian stock exchange was also affected by negotiations on the US debt ceiling, which have been dragging on for weeks and have generated caution in global markets.
Representatives of US President Joe Biden and the Republican Party ended another round of debt ceiling talks on Tuesday, but there were no signs of a possible deal.
The US Treasury says it has until June 1 to secure the payment of US debts. If an agreement is not reached by that deadline, a historic default could be triggered, which would wreak havoc on global markets.
A White House analysis suggests that a short-lived default would result in half a million jobs lost and a 0.6% drop in the country’s GDP (Gross Domestic Product). A default that lasts longer could lead to the loss of 8.3 million jobs and a 6.1% drop in GDP.
Despite the consensus in the market that an agreement between Democrats and Republicans is the most likely path to the US debt impasse, the lack of definitions increases investor caution and causes volatility. Furthermore, even if an increase in the debt limit is achieved, US economic growth could be affected.
Uncertainties about the US debt continue this Tuesday, as there are still no definitions on an agreement.