Dollar continues to fall, closing at R$ 4.73, reaching its lowest level in more than twelve months
The US currency ended the trading session with a devaluation of 1.00%, trading at R$ 4.7326. This performance reflects the lowest dollar value in over twelve months. In the month, the currency presents an accumulated drop of 1.18%, while throughout the year, it presents a drop of 10.33%.
Photo Reproduction/Reuters/Bruno Domingos
This Monday (24), the dollar presented another day of devaluation in Brazil, in the midst of a week of caution due to the imminent interest rate decision by the Federal Reserve (Fed), the US central bank, and the release of the official survival preview in Brazil, scheduled for tomorrow. The US currency closed the trading session with a drop of 1.00%, being quoted at R$ 4.7326. This result represents the lowest dollar level in over twelve months.
Last Friday, the dollar presented a fall of 0.45%, being quoted at R$ 4.7805. With this performance, the currency accumulated a reduction of 1.18% over the month and 10.33% over the year. In the stock market, the Ibovespa rose by 0.94%, closing the day at 121,000 points, reaching its highest level since April 2022.
International market
The fall of the dollar has been driven by various economic factors, both internal and external. This week, the financial market will be attentive to the event of the greatest colonel: the Federal Reserve's monetary policy decision, which will determine the new level of interest rates in the USA. It is expected that the autarchy promotes a new increase in the US basic rate, raising it by 0.25 percentage points.
Although it paused the increase in interest rates in its last meeting, the Federal Reserve had already signaled the need for more hikes to contain economic growth in the United States, which, although it has slowed down, is still above the 2% target. During the current meeting, emphasis will be placed on the thorough analysis of indications that will influence future decisions. Continuing on an international level, the week saw the release of the first estimate of the US Gross Domestic Product (GDP) for the second quarter. In addition, on Friday, data will be published for the PCE, which is the US consumer spending price index.
National market
Among the national indicators, this week's Focus bulletin was postponed to Tuesday (25) due to the optional point due to the Brazilian National Team's game in the Women's World Cup. Also, tomorrow will be Broad National Consumer Price Index released 15 (IPCA-15), considered the preview of the country's official adoption. The market expects a slight deflation in the monthly comparison.
Continuing at the national level, next Friday will reserve important events on the domestic agenda. On that day, the results of the Continuous National Household Sample Survey (PNAD), conducted by the Brazilian Institute of Geography and Statistics (IBGE), will be released, showing the country's unemployment rate. In addition, investors will be watching the corporate earnings season.
What does it represent?
The devaluation of the dollar has impacts on the Brazilian economy. On the one hand, it favors the exchange rate for exporting companies, which manage to sell their products in dollars and convert profits into reais at a more favorable rate. This boosts exports and may contribute to an increase in the country's trade balance. On the other hand, the fall in the dollar makes imports more expensive, which could negatively impact some sectors of the economy, such as electronics and automobiles. In addition, the devaluation of the dollar can also raise concerns about inflation, as imported products become more expensive.
