Dollar closes sharply and the stock market falls on fear of recession

The commercial dollar closed today up 2.62%, quoted at R$ 5.249. The Ibovespa, the main index of the Brazilian Stock Exchange (B3), which brings together the most traded companies, closed with a sharp drop of 2.06%, at 111,716.00 points.

In the week, the dollar accumulated a drop of 0.20%, and the Ibovespa, up 2.23%.

Today’s market movement was mainly influenced by the prospect of rising interest rates in major economies, which fuels fears of a recession.

The Central Bank of Brazil on Friday sold US$ 2 billion in currency sale auctions combined with purchase auctions on the interbank market, in an operation it had not carried out since the end of 2021.

The BC uses this instrument mainly in times of lack of liquidity in the spot foreign exchange market, which normally occurs at the end of the year. The market comment is that the BC may have carried out the operation to adjust the exchange coupon (interest rate in dollar), which accelerated the rise recently. In theory, this type of movement does not have a direct effect on exchange market prices.

The dollar value disclosed daily by the press, including the UOL, refers to the commercial dollar (learn more by clicking here). For those who are going to travel and need to buy currency at exchange brokers, the value is much higher.

Ibovespa Index

The Ibovespa registered a drop of 2.06% this Friday (23), following the climate of the stock markets abroad, where concerns about the growth of global economic activity prevailed.

“Markets extend a downtrend after tougher decisions by the world’s main monetary authorities”, according to an analysis by Guide Investimentos, drawing particular attention to the move by the Federal Reserve in the United States.

Figures showed on Friday that business activity in the US contracted for the third straight month in September, albeit at a slower pace, while in Europe, data pointed to a probable recession in the euro zone.

*With information from the Reuters news agency

About Yadunandan Singh

Born in 1992, Yadunandan approaches the world of video games thanks to two sacred monsters like Diablo and above all Sonic, strictly in the Sega Saturn version. Ranging between consoles and PCs, he is particularly fond of platform titles and RPGs, not disdaining all other genres and moving in the constant search for the perfect balance between narration and interactivity.

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