Foreign exchange continues to fall and closes at R $ 5.25 with the increase in risk appetite; Bolsa flirting again with 123 thousand points
O Brazilian financial market operated on Tuesday, 18, pressured by the increased risk appetite of international investors and the impacts of the ex-chancellor’s testimony Ernesto Araújo on Covid-19 Parliamentary Commission of Inquiry (CPI). After going most of the morning with no definite direction, the dollar went down and closed the day with a 0.22% retraction, at R $ 5.255, after hitting a maximum of R $ 5.281 and a minimum of R $ 5.232. The exchange rate closed the day before with a slight fall of 0.09%, quoted at R $ 5.266. O Ibovespa, reference of the Brazilian Stock Exchange, closed practically stable, with an increase of 0.03%, but enough to bring the trading session to 122,979 points, the best performance since January 14, when it closed at 123,480 points. On Monday, the 17th, the index closed with a high of 0.83%, to 122,937 points.
The dollar maintained its downward bias against the emerging currencies basket, signaling a greater appetite for investors to risk. Markets around the world are waiting for the message that the Central Bank of the United States (Fed, in English) will give on Wednesday, 19, about monetary policy after inflation in April comes much higher than projected by analysts. The fear is due to the reduction of stimuli, which could reflect in a less robust growth of the biggest economy in the world and the cut in the injection of dollars in the global markets. Also in the international news, the Eurozone registered a 0.6% drop in the Gross Domestic Product (GDP) in the first quarter, in comparison with the last three months of 2020, while in the annual margin the retraction was 1.8%. The result was already expected by analysts amid challenges to resume activities after the emergence of new variants of the new coronavirus. Japan’s economy registered a fall of 1.3% in the first quarter, compared to the same period at the end of last year, and a decrease of 5.1% in the annual average, higher than expected by the market.
In the domestic news, all attention was focused on Araújo’s testimony at Covid-19 CPI. The former chancellor, who surrendered his post at the end of March, admitted to senators that he asked for the replacement of the Chinese ambassador, but that he never promoted friction actions with Asians. The Senate receives on Wednesday the former Minister of Health, Eduardo Pazuello. O Ministry of Economy revised upwards the forecasts for the expansion of the Brazilian economy and the inflation in 2021, according to data from the Macrofiscal Bulletin released this Tuesday. The estimate for GDP went from 3.2% to 3.5%, while the outlook for inflation was 5.05%.