Exchange rate: Dollar closes higher due to fiscal concerns and outflow of resources from the stock exchange

The dollar spot ended this Friday’s session (22), rising in the domestic exchange market, reaching R$4.9986, an increase of 0.39%. This movement was driven by the appreciation of the American currency abroad and concerns about fiscal issues in Brazil following the release of the bimonthly income and expenditure report by the federal government.

Low volatility

Despite the risk aversion climate, the dollar registered low volatility, with a fluctuation of less than three cents between the day’s minimum and maximum. This demonstrates a scenario of caution among investors, who seek protection in the face of fiscal uncertainties and the possible outflow of resources from the stock exchange.

Dollar Futures Contract

The dollar futures contract for April moved just over US$12 billion, and at times it operated below the spot dollar rate. This phenomenon suggests a greater demand in the spot market, highlighting a possible outflow of resources from the country and low liquidity.

Public revenue and expenditure

In the morning, the government announced a block of R$2.9 billion in discretionary expenses in the Budget, increasing concerns about the ability to generate additional revenue to meet the primary deficit target of 0% of GDP this year. This measure contributes to investor discomfort.

International context

Abroad, the DXY index, which assesses the behavior of the dollar in relation to other currencies, once again surpassed 104.00 points, influenced by the weakening of the euro and the decision of the People’s Bank of China to allow the weakening of the yuan. This scenario boosted the dollar against most emerging currencies.

Future perspectives

Experts point to a rigidity in the exchange rate in the short term, with uncertainty about the start of the interest rate reduction process in the United States and concerns about the crisis in the Chinese real estate sector. In the local scenario, factors such as the negative exchange rate flow and the prospect of changing the fiscal target in the first half of the year contribute to weakening the real’s strength. Therefore, investors must pay attention to these developments and consider protection strategies amid market volatility.