Exchange rate: Dollar closes slightly higher; session is marked by lack of indicators and low volatility

The dollar closed up 0.07%, quoted at R$5.07. The session was marked by low currency volatility, due to the lack of indicators both here and abroad.

The market, however, is paying attention to federal aid to Rio Grande do Sul, and how this could eventually affect the domestic fiscal.

According to the chief economist at Nova Futura Investimentos, Nicolas Borsoi, the market is trying to find a direction.

“The 0.25 percentage point (pp) drop in the Selic (base interest rate) is good for the real, but the market is worried about the size of the revenue that goes to Rio Grande do Sul, it is an additional factor of fiscal pressure, increasing the risk”, he ponders.

Cautionary scenario before the Copom decision

The expectation surrounding the decision by the Central Bank’s Monetary Policy Committee (Copom), scheduled for Wednesday (8), contributes to investors’ caution. Reduced liquidity and modest fluctuations are a reflection of this environment.

Government seeks solution for Rio Grande do Sul

Sources indicate that the government intends to assist Rio Grande do Sul without compromising fiscal stability. The possibility of releasing extraordinary credits initially controlled and later monitored is considered.

Rodrigo Pacheco suggested the approval of a Proposed Amendment to the Constitution (PEC) along the lines adopted during the pandemic, aiming to free up resources for Rio Grande do Sul. The measure has support from various political sectors.

DXY operates higher abroad

In the international market, the DXY index, which measures the performance of the dollar in relation to six strong currencies, operated slightly higher, driven by losses in the yen. The euro and pound showed slight gains against the dollar.

Positive outlook for reality

The improvement in Brazil’s rating outlook by Moody’s, combined with the employment report in the USA, contributed to the reduction in the dollar. The favorable external scenario may influence the exchange rate, which should fluctuate between R$5.05 and R$5.10.

_{*With information from the CMA Agency}