Dollar rises to R$5.16, influenced by Brazil and abroad

After yesterday’s relief (17), the financial market had a day of tension this Wednesday (18). The dollar rose more than 1%, influenced by Brazil and abroad. The pessimism in the international market made the stock market reduce gains during the afternoon, but it did not prevent the increase in the Ibovespa index.

The commercial dollar ended the day sold at R$5.163, up R$0.057 (+1.12%). The quotation operated downwards during the morning, but reversed the trend after statements by President Luiz Inácio Lula da Silva in favor of a correction of the Income Tax table.

Despite today’s appreciation, the currency has accumulated a 2.22% drop in 2023. In addition to internal factors, the deterioration in the US market during the afternoon contributed to the rise in the dollar.

Ibovespa

In the stock market, the B3 Ibovespa index closed at 112,228 points, up 0.71%. The indicator rose 1.68% around 12:15 pm, but slowed down throughout the afternoon. The good performance of banks and mining companies, however, prevented the index from closing down. In the case of mining companies, the reopening of the Chinese economy is heating up demand for metals.

In Brazil, Lula’s declarations that he would be willing to discuss, with the economic team, the increase in the exemption of the Income Tax table to R$ 5 thousand were not received by investors, who fear a deficit larger than expected for 2023 Yesterday, the Minister of Finance, Fernando Haddad, had declared that the Income Tax reform would remain for the second semester.

On the foreign market, the announcement of declines in retail sales and industrial production in the United States increased the fear that the largest economy on the planet will enter into recession.

At the same time, directors of the Federal Reserve (Fed, US Central Bank) once again made harsh comments about the need to control inflation in the country. US stocks had the biggest drops in more than a month today.

*with information from Reuters

Translated to english by RJ983

From Brazil, by EBC News

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