Dollar moves up weekly against real amid uncertainty about virus and stimulus in US By Reuters

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By Luana Maria Benedito

SAO PAULO (Reuters) – The dollar traded between stability and a slight drop against the real on Friday, but it was heading to close a difficult week for risky assets on the rise in the face of fears about the increase in coronavirus cases and an impasse in the negotiations for more fiscal stimulus in the United States.

At 10:24, the dollar fell 0.04%, to 5.6213 reais in the sale, while the main future dollar contract was up 0.12%, to 5.622 reais.

According to a note from the Guide Investimentos economic team, “international financial assets start the day in a positive tone, while investors continue to weigh the risks of the scenario (cases of Covid-19, Brexit and lack of stimulus in the USA) with attractive entry points”.

These agendas sparked global waves of caution during the week after several European cities re-imposed lockdowns to combat the spread of Covid and amid increasingly dim prospects that the White House and the US Congress will agree on a package. broad range of economic support before the presidential elections.

On Thursday, offering some relief to the markets, United States President Donald Trump said he is willing to increase his $ 1.8 trillion offer for a Covid-19 relief package to reach a according to the Democratic President of the Chamber of Deputies, Nancy Pelosi.

Despite the apparent recovery in global risk appetite, “in the face of a scenario that remains very uncertain, markets are expected to continue to show highly volatile movements,” wrote the Guide team.

This morning, the US currency was losing against a basket of the major currencies, while emerging currency pairs of the real performed mixed.

Meanwhile, in Brazil, the mayor, Deputy Rodrigo Maia (DEM-RJ), defended on Thursday night the approval of the Constitutional Amendment Proposal (PEC) of the Federative Pact, emphasizing that the project that will define conditions to enable compliance with the spending cap rule next year it needs to be voted on before the 2021 Budget.

“The defense in favor of the approval of the emergency PEC (…) should promote relief insofar as it sends the correct signal regarding the conduct of fiscal policy”, said the analysts at Guide.

The health of Brazilian public accounts has dominated the attention of investors in recent weeks, amid doubts about the government’s ability to finance a social assistance program without disrespecting the spending ceiling.

The dollar was heading to close a difficult week for risky assets up 1.64% against the Brazilian currency. In the accumulated of 2020, the American currency already has a jump of about 40% in relation to the real.

The previous day, the US currency in cash was up 0.36%, to 5.6237 reais on the sale.

The Central Bank will hold a traditional swap auction to roll up to 10,000 contracts maturing in April and July 2021.



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