Dollar rises after Bolsonaro’s new attacks on the STF; Ibovespa retreats

The dollar rose sharply against the real this Wednesday after the September 7 holiday, as traders heightened caution after new attacks by President Jair Bolsonaro on Supreme Court (STF) ministers Alexandre de Moraes and Luís Roberto Barroso, who he is also president of the Superior Electoral Court (TSE).

At 9:53, the dollar advanced 0.52%, to R$ 5.2031 on sale, and jumped 0.90% at the highest of the day, to R$ 5.2233, while the most liquid dollar futures contract increased by 0.65%, to R$5.2205.

On the other hand, the São Paulo stock exchange adopted a negative bias in the return of the holiday, with financial agents reflecting on this Wednesday potential developments of demonstrations in the country the day before and adjusting positions to the behavior of Wall Street on Tuesday, when there was no negotiation in the Brazilian trading session.

At 10:04 am, the Ibovespa fell 0.4% to 117,392.13 points.

The Ibovespa futures contract with a shorter maturity, on October 13, decreased 0.6%.

The new attacks took place on Independence Day, when Bolsonaro participated in events in Brasília and São Paulo, and now investors are keeping an eye on the reactions of Congress and the Judiciary.

A possible impeachment of President Jair Bolsonaro has already been discussed by several parties that so far do not systematically oppose the government, but which condemned Bolsonaro’s speeches on 7 September.

This behavior reflected the assessment of a good part of the markets that Bolsonaro’s fiery speech contributed to the aggravation of institutional tension in Brazil, which could have negative repercussions on economic performance.

Tuesday’s events show that Bolsonaro “still has a lot of popular support and remains an important character in the political/electoral scenario”, but “on the other hand, the institutional environment should become even more tense”, wrote analysts at Genial Investimentos. “The result will be more uncertainty and volatility and probably less growth and more inflation.”

Further hampering the performance of the Brazilian currency, the mood abroad was also cautious amid fears of a slowdown in economic growth, as investors monitored the prospects for stimulus from the Federal Reserve, the European Central Bank (ECB) and the Bank of Brazil. People of China.

Local risk assets “will not even be able to count on the external good humor to alleviate the fear with the situation of various uncertainties that the country is experiencing”, said in a note Victor Beyruti, an economist at Guide Investimentos.

The dollar index against a basket of currencies was up 0.1% this morning as Wall Street futures traded in the red.

In the last session, on Monday, the US spot currency fell 0.14%, to R$5.1764 on sale.