Brazilian Foreign Exchange Market on US Payroll Expectation

The permanence of internal fiscal uncertainties, the water crisis, rising global inflation, the expectation of reduced stimulus in the main economies and signs of accommodation of growth have harmed the performance of the real, that is, it continues to rise. Despite few moments of correction and frustrated attempts by the Brazilian Central Bank to contain the devaluation of the real with exchange swap auctions, it has not yielded results.

Yesterday the secretary of the treasury, Bruno Funchal, stated that the message about the modification of the 2022 budget should be sent by the beginning of November, but the government is awaiting the approval of the Proposed Amendment to the Constitution (PEC) of the precatoria. The PEC is essential to make room in next year’s Budget for public expenditure. The rapporteur of the proposal, Deputy Hugo Motta (Republicans-PB), presented his opinion this Thursday, accepting the solution to limit the growth of court orders to the dynamics of the ceiling rule, correction by .

US officials have warned of the importance of raising the debt ceiling before the country runs out of money, but Republican lawmakers have been reluctant to ease the ceiling’s extension. Alleviating the stalemate, however, Senate Republican top Mitch McConnell has proposed that his party allow an extension of the federal debt ceiling through December. Not even this good news gave encouragement around here for the exchange.

In the US, they posted losses in the week ending October 1, 2021. There were 326 million orders. Wednesday’s strength associated with yesterday’s data reinforces the thesis of who the tapering will be announced for November. But today comes out the , which is the most expected data to support this decision. And you know that if this tapering is actually announced soon, the dollar will appreciate.

Today China returns after the long holiday period.

The energy crisis in Europe, which has a little help from Vladimir Putin, gives signs that Russia is ready to increase supplies to Europe. Germany fell 4% in August, the second set of disappointing data from Europe’s biggest economy in two days. European Central Bank officials discussed a further cut in asset purchases last month and some even argued that markets may already be ready for the end of emergency support, the September 9 monetary policy meeting showed Thursday. . From this perspective, a purchase pace similar to the level prevailing at the beginning of the year would be appropriate. In the end, the authorities agreed to only “moderately” reduce asset purchases, while insisting that this was not a “stimulus reduction” as weak price pressures still require support.

Here in Brazil, investors continue to follow agendas such as the PEC dos Precatório, the Income Tax Reform and the debate around the extension of emergency aid for the population. The more these agendas remain unresolved, the more the country risk rises with the uncertainty as to whether we will stay within the spending ceiling and also where the funding for the new Bolsa Família will come from. Today, the IPCA comes out in September, an important index to measure inflation.

Yesterday, the director of monetary policy at the Central Bank, Bruno Serra, said that, just for the issue of overhedge, the expected demand for the end of this year will be of 17.6 billion dollars, and that if necessary, it will act in the exchange rate. The fall in the pandemic had a major impact on the depreciation of the real. The Central Bank foresees relief in the exchange market next year after the end of the demand for dollars due to the dismantling of overhedge by banks and the conclusion of the process of reducing companies’ external indebtedness. I do not know…

Yesterday, in another day of appreciation of the dollar, the American currency closed quoted at R$ 5.5155.