Dollar closes higher, at R$ 6.17, despite auction of US$ 3 billion from BC
American currency recorded an increase of 0.38%. Central Bank interventions in the foreign exchange market already total 26.7 billion in two weeks
The spot dollar closed higher on Thursday (12/26). At the end of the trading session, at 5 pm, it recorded an increase of 0.38%, quoted at R$ 6.17. At the maximum of the day, it reached R$ 6.19. On Monday (12/23), the American currency rose 1.87%, to R$ 6.18.
In the morning, between 9:15 am and 9:20 am, the Central Bank (BC) held a new dollar auction, in another attempt to lower the currency rate. According to the Central Bank’s Department of International Reserves (DEPIN), nine proposals to buy the American currency were accepted, which in total reached US$ 3 billion.
With the new amount poured into the market, the BC’s interventions in the exchange rate totaled US$ 26.7 billion since December 12 – in a two-week period, therefore.
The Central Bank has held line auctions, in which there is a commitment to repurchase the amount offered, and in cash (without the repurchase agreement). The amounts are offered directly to specific financial institutions, a total of 16 banks – in the jargon, the “exchange dealers”
Low liquidity
In the evaluation of experts, between Christmas and New Year there is a natural drop in the number of businesses – the market operates with low liquidity, as they say in the jargon. With this, the operations of buying and selling dollars have a greater impact on the price of the American currency. Still, the auction was not enough to contain the rise of the American currency.
Tax issue
The great pressure on the American currency, in the evaluation of technicians, has been exerted by the fiscal issue (which deals with the relationship between revenues and expenses of the public administration). The spending cut package prepared by the government and approved by the National Congress was considered “shy” by groups of economists and investors.
In addition, there are external factors that weigh on the rise of the dollar, such as the prospect of interest rate cuts in the United States. Whenever a reduction in the American rate is threatened, the dollar rises. This is because high interest rates make investments in U.S. debt securities, Treasuries, especially attractive.
Uncertainties about what will happen to the global economy over a new administration of Donald Trump, considered especially protectionist, also compromise the balance of the dollar. In addition, at the end of the year, the demand for the American currency increases, since foreign companies based in Brazil leverage their money remittances to the headquarters.
Stock Exchange
This Thursday (12/26), the Brazilian Stock Exchange (B3) closed higher. Ibovespa, B3’s main index, recorded an increase of 0.25%, to 121,074 points. The indicator was pulled by the stocks with the greatest weight in the index, such as those of Petrobras, which rose 1.18%, and those of Vale, which increased by 0.40%.
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