Dollar falls, stock market rises and Brazil’s outlook improves by Moody’s

O dollar showed a firm drop this Thursday (2) in the domestic exchange market and returned to approaching the level of R$ 5.10 at closing. Wednesday’s signal from the president of the Federal Reserve (Fed, the US central bank), Jerome Powell, that there will be no interest rate hike in the United States continued to reverberate this Thursday, leading to further weakening of the US currency abroad and the decline in Treasury rates. The result benefited the real. O Ibovespa reacted well to the two main news of the May 1st holiday: the elevation of the outlook for Brazil’s credit rating by Moody’s, from stable to positive, and the signals, considered favorable about United States interest rates, issued by the Federal Reserve ( Fed, the North American central bank) in the monetary policy decision, on Wednesday.

Thus, the B3 index operated higher since the opening and ended the session with a gain of 0.95%, at 127,122.25 points. This Thursday, it fluctuated from a low at opening at 125,925.55 to 127,670.16 points, the day’s high, with a turnover of R$24.1 billion in the session. This week, the Ibovespa now advances 0.37% – for the year, it still drops 5.26%. The change in Brazil’s rating perspective, from “stable” to “positive”, by the risk rating agency Moody’s also played in favor of the real. According to operators, this set of information opened space for a stronger correction movement in the currency, since the dollar closed on Tuesday, 30th, up 1.51%, close to R$ 5.20 and with an appreciation of 3.53% in April.

Down since the opening, the spot dollar broke the floor of R$5.15 in the first half hour of trading and touched the level of R$5.10 at the end of the morning. In the afternoon, the currency appeared to operate below R$5.10, registering a minimum of R$5.1004, amid the deepening fall in Treasury rates. At the end of the day, the dollar fell 1.53%, quoted at R$5.1128 – the lowest value since April 11th.

*With information from Estadão Conteúdo