The dollar operates with volatility on Tuesday (29), with no defined direction, reflecting the caution of international investors before the first presidential debate in the United States, while on the domestic scene the focus remains on the country’s fiscal situation and on the discussions around the new government social program, called Citizen Income.
At 10:36, the US currency fell 0.12%, quoted at R $ 5.6291. In the maximum, it reached R $ 5.6701 and, in the minimum, R $ 5.6071 See more quotes.
Bovespa operates on a high, around 95 thousand points.
On Monday, the dollar closed up 1.42%, to R $ 5.6358 – highest closing value for the dollar since May 20 (R $ 5.6875). With the result, accumulate increase of 2.82% in the month and 40.55% in the year.
The Central Bank said it would begin rolling over 130,890 foreign exchange swap contracts due on November 3, 2020, for a total of $ 6.5 billion, according to Reuters.
Market reacts badly to the announcement of Citizen Income by the government
The strong rise the day before came amid the terrible repercussions of the measures to finance the new social program of the government, called Citizen Income. After the reactions of the financial market and the political world, advisers close to President Jair Bolsonaro began to advocate a change in the program, according to Ana Flor’s Blog.
For specialists in public accounts, the proposal to roll over the payment of court orders – mandatory government expenditure on public debt – to finance a new social program was a rupture, a signal of abandonment of the fiscal commitment. The Brazilian Bar Association (OAB) issued an opinion in which it classified the proposal as unconstitutional.
The broker Necton, for example, revised its projection for the dollar from R $ 5.90 to R $ 6.00 at the end of 2020. “The maneuver in relation to the precatories and the market reaction in general show that the fiscal space Given that the government cannot interrupt Emergency Aid, otherwise the economy will be thrown into an economic slowdown and taking into account that there is no room to cut further spending as demand for public services will increase as a result of the crisis, so we have an impasse that will not be resolved “, evaluated economist André Perfeito.
On the external scene, caution remains amid concerns about the advancement of coronavirus and the pace of recovery in the global economy. Assets considered risky, such as emerging currency pairs of the real, presented mixed performance, with market agents operating in standby mode.
In the U.S., President Donald Trump and Democratic challenger Joe Biden will hold their first 90-minute television debate in Cleveland, Ohio, on Tuesday, five weeks before the election.
In Europe, the eurozone’s economic confidence improved more than expected in September, thanks mainly to an increase in optimism in the service sector despite concerns about a second wave of coronavirus. The European Commission’s monthly survey showed that sentiment in the 19 countries using the euro rose to 91.1 points this month from 87.5 in August, exceeding market expectations.
The World Bank said Tuesday that the coronavirus pandemic is expected to lead the East Asian and Pacific region, as well as China, to record the slowest growth in more than 50 years, while up to 38 million people will be driven into poverty. The bank said the region is expected to grow just 0.9% this year, the weakest rate since 1967.
Dollar variation in 2020 – Photo: G1