The commercial dollar closed up 0.14% on Tuesday (29), sold at R $ 5,641, on the third high in a row. It is the highest closing value in more than four months, since May 20 (R $ 5,689).
THE Ibovespa, the main index of the Brazilian Stock Exchange, amended its third consecutive fall and closed with a devaluation of 1.15%, to 93,580.35 points. It is the lowest level of the Stock Exchange in more than three months, since June 16, when the index scored 93,531.17 points.
Yesterday (28) the Ibovespa had fallen 2.41%, to 94,666.31 points, while the dollar had closed up 1.42%, sold at R $ 5.633,
US presidential debate and economic aid
The dollar fluctuated during the day, reflecting the uncertainties surrounding the US elections, on a day of debate between the current president, Donald Trump, and his Democratic opponent, Joe Biden.
Investors were also watching for news from the United States House looking for signs of progress in negotiating an economic aid package.
“There is a little bit of caution in the market in general, and the investor keeps an eye out to see if a fiscal stimulus package will come out,” explained Victor Beyruti, economist at Guide Investimentos.
Brazilian fiscal situation worries
In Brazil, doubts about the health of public accounts remained in the spotlight after the government decided that the Citizen Income aid project will be funded by resources that will not come from spending cuts. The proposal raised suspicions about a “trick to hide escape from the ceiling”, as the Minister of the Federal Court of Accounts (TCU), Bruno Dantas, said on Twitter.
The news had already shaken the market on Monday, when the dollar closed up 1.42%, sold at R $ 5.633, the highest level since May 20.
“The market is still digesting the news of the Citizen Income financing, and will be waiting for some explanation from the government” on how to reconcile this spending with an already tight budget, said Beyruti.
Sidnei Moura Nehme, economist and executive director of NGO Corretora, said in a note that, given the fiscal scenario, “the time may come ‘to throw in the towel’ and assume a largely defensive stance, since the imbalances may affect the whole dynamic from the country.”
In 2020, the dollar has already accumulated a gain of more than 40%, driven by a scenario of low interest rates, fiscal uncertainties and political tensions in Brasília, leaving the real in the worst performance among a basket of more than 30 currencies in the year.
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