After two hikes, Bolsa fell 0.28%; dollar rises for the 3rd consecutive day – 10/15/2020

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On the third day of increase, the commercial dollar rose 0.48% to R $ 5,625 in sales reflecting the global risk aversion climate with the increase in cases of covid-19 in Europe and concerns about economic recovery in the United States.

The Ibovespa, after two consecutive highs, closed the day down 0.28%, at 99,054.06 points. Since the beginning of the trading session, the negative tone prevailed on the Stock Exchange due to the external scenario, but the rise in the shares of JBS and steel companies CSN and Usiminas helped to mitigate the influence.

Even with the drop, the main index of the Brazilian Stock Exchange ended the session above 99 thousand points.

The Brazilian agenda also influenced the result. The Central Bank’s Economic Activity Index (IBC-Br), a sign of Gross Domestic Product (GDP), grew 1.06% in August compared to July, but was below expectations, up 1.60%.

The dollar value released daily by the press, including the Twitter, refers to the commercial dollar. For those who are going to travel and need to buy currency at foreign exchange brokers, the value is much higher.

Exterior

News of lockdowns in major European economies due to a second wave of covid-19 directed the broader markets, affecting the appetite for risky assets amid fears about the economic impact of measures to combat the pandemic.

“Today there is little secret: the real accompanies the main currencies,” Daniel Herrera, an analyst at Toro Investimentos, told Reuters. “A more negative climate seems to prevail, especially in Europe, with cases of covid rising very fast.”

In addition, said Herrera, the news that US Treasury Secretary Steve Mnuchin said it was difficult to reach an agreement with Congress for an aid package before the November 3 presidential election collaborated with international caution.

Today’s data showed that weekly US unemployment claims rose unexpectedly last week, which may raise fears that the covid-19 pandemic is causing lasting damage to the job market in the world’s largest economy, underscoring the urgency for more fiscal support in the country.

Internal scenario

Meanwhile, in Brazil, the health of public accounts and the progress of the government’s reform agenda remained the focus of investors.

“We continue to follow the Brazilian news, but it is difficult to get a more robust reform this year, and the market works in standby mode,” commented Herrera.

Doubts about how the government would finance a new social assistance project without breaking the spending ceiling and delaying the presentation of structural reforms – electoral promises of President Jair Bolsonaro (without a party) – were pointed out as factors that contributed to a recent surge in the dollar in relation to the real.

The current level of the dollar represents an increase of almost 8% since the end of July. In the accumulated for 2020, also facing an environment of extremely low interest rates, the US currency shows a jump of about 40% against the real.

(With Reuters)

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