Dollar has biggest weekly drop since May, to R$ 5,196; Ibovespa rises

The dollar closed on Friday (27) in a fall of 1.17%, quoted at R$ 5.196 on sale, after registering high on the eve. It is the fourth session of losses since Monday (23) for the US currency, which ends the week with an accumulated devaluation of 3.52% against the real — the highest since the first of May (-3.74%), interrupting a streak of three consecutive positive weeks.

It had been more than a month since the dollar closed a week below R$ 5.20. The last time was on July 16 (R$ 5,115).

The Ibovespa rose 1.65% — the second best result of the week, losing only to Tuesday (+2.33%) — reaching 120,677.60 points. With today’s performance, the main index of the Brazilian Stock Exchange (B3) ends the week at an accumulated increase of 2.22%, after two consecutive lows.

In August, both the dollar (-0.28%) and the Ibovespa (-0.92%) are falling, leaving two sessions to close the month. In 2021, the balance is positive for both: the currency has a slight increase of 0.13%; the indicator, of 1.40%.

The dollar value reported daily by the press, including the UOL, refers to the commercial dollar. For those who are traveling and need to buy currency from exchange brokers, the value is much higher.

“Mysterious” Fed pulled market

This week, investors’ attention focused on today’s speech by Jerome Powell, chairman of the Fed (Federal Reserve, the Central Bank of the United States). The market expected Powell to indicate when the monetary authority intends to start reducing stimulus to the US economy — which it did not.

The executive only signaled that the Fed will remain cautious about an eventual decision to raise interest rates — now close to zero — as it tries to bring the economy back to full employment. He also repeated that he wants to avoid controlling high inflation, which he classifies as “transient”, so as not to discourage job openings in the process.

The Fed once again stressed that the beginning of ‘tapering’ [redução gradual da compra de ativos financeiros para, assim, diminuir a injeção de recursos na economia] it does not mean that we are closer to interest rate increases, and this makes the market, in my opinion, to have an even calmer view regarding the beginning of the reduction of stimuli, which may have a less volatile reaction.
Mauro Morelli, from Davos Investimentos, tells Reuters

The current monetary policy adopted by the Fed is “ultra-slack”, as Alexandre Espirito Santo, from Orama Investments. It’s like throwing money out of helicopters. This is supplying the world with liquidity, so the market is trying to foreshadow clues as to when the Fed will tighten its policy.”

(With Reuters)