Dollar rises by almost 1.5% and reaches R$5.20 waiting for the Fed; Ibovespa is falling | Economy

The dollar was rising sharply this Tuesday (30th), as investors continued to wait for the next decision from the Federal Reserve (Fed, the North American central bank), scheduled for Wednesday (1st).

The expectation is that the institution will keep the basic rates in the United States unchanged, between 5.25% and 5.50%. Attention should be focused on the speeches of the institution’s president, Jerome Powell, and the minutes of the meeting, which should be released next week.

On the indicator agenda, national and international inflation and employment data are on the radar. Here, the focus is on the tax agenda and the debates on Brazilian tax reform.

Ibovespa, the main stock index on the Brazilian stock exchange, is falling.

See below for a summary of the markets.

At 3:55 pm, the dollar was up 1.43%, quoted at R$5.1877. At its maximum, it was R$5.1925. See more quotes.

On Monday, the North American currency closed down 0.03%, quoted at R$5.1148.

As a result, you accumulate:

• drop of 0.03% in the week;
• increase of 1.98% in the month;
• gain of 5.41% in the year.

At the same time, the Ibovespa fell 1.09%, to 125,955 points.

On Monday, the index rose 0.65%, to 127,352 points.

As a result, you accumulate:

• increase of 0.65% in the week;
• drop of 0.59% in the month;
• decline of 5.09% in the year.

Understand what makes the dollar rise or fall

The main highlight of this week is the new interest rate decision from the Federal Reserve (Fed, the North American central bank), scheduled for Wednesday (1st).

US Treasury Secretary Janet Yellen said on Tuesday that Americans are generally better off because wage increases are now outpacing price rises, but the Biden administration has more work to do to reduce the cost of living.

At a hearing of the US House of Representatives Committee on Ways and Means, Yellen stated that inflation has decreased considerably, but that the prices of many products are higher than before the Covid-19 pandemic, which is affecting many North America. -Americans.

Last Friday, the PCE price index, the Fed’s favorite for monitoring inflation, rose 0.3% in March and 2.7% in 12 months, both in line with market estimates.

With the release of the data, 10-year Treasury rates, a global reference for investments, showed an even greater drop, and experts indicated that the chance of the Fed starting to cut interest rates in September was on the radar.

The market projection is that the institution will keep US base rates unchanged between 5.25% and 5.50%, but it is the speeches by Fed President Jerome Powell and the minutes of the meeting that should remain in investors’ sights. , which seek new signals about the future of interest rates in the country.

Higher interest rates in the USA end up driving investments into the largest economy in the world, which takes money away from other markets, especially emerging ones, such as Brazil.

On the indicator agenda, the United States trade balance and data from the North American labor market are on the radar, as well as the price managers index (PMI) for the United States, China, and the United Kingdom. and the eurozone.

In Brazil, the focus is on the General Price Index – Market (IGP-M), producer inflation and employment indicators from Caged and Pnad Contínua.

Still here, the fiscal and monetary agendas remain under the spotlight, as investors await the decision of the Monetary Policy Committee (Copom), on May 8.

This text, from 2023, only brought the general lines of the tax reform. Now, it is necessary to approve the regulations, which will be done via bills. Among the points to be regulated are the products that will make up the basic food basket and the so-called “sin tax”, created to discourage items that are harmful to health and the environment.

In total, around R$21.95 billion in extraordinary dividends will be released, out of a total of R$43.5 billion. Payments will be made in two installments: in May and June this year.

The Casas Bahia Group filed a request for extrajudicial recovery last Sunday (28), to restructure debts estimated at R$4.1 billion. The company’s shares rose xxx% on Monday (29) after the order was announced.