Dollar drops slightly and goes to R$5.067; Stock market rises awaiting Copom

The dollar closed the day with a slight drop of 0.12%, quoted at R$5.067, this Tuesday (7).

Ibovespa, B3’s main index, closed the day with an increase of 0.58%, at 129,210.48 points.

The value of the dollar reported daily by the press, including the UOL, refers to the commercial dollar (learn more by clicking here). For those who are going to travel and need to buy currency at exchange brokers, the reference is the tourist dollar, and the value is much higher.

What happened

The North American currency remained stable against the real this Tuesday. Market movement is in line with external relief on the prospects for monetary easing in the United States. “We are still in a defining scenario, in a way, after that strong rise (in the dollar) that we had at the end of April”, said Thiago Lourenço, operator at Manchester Investimentos.

Dollar has found resistance to continue falling, says analyst. Lourenço highlighted a movement of correction in the markets since the dollar jumped to the peaks of the year last month, but considered that the dollar has found a certain resistance to continue falling. “We have to monitor the development of the next information regarding monetary policy in the United States, this should define how the price dynamics will be”, added Lourenço.

US labor market report was weaker than expected last week. The document fueled bets that the US central bank will ease monetary policy later this year, with traders predicting around two interest rate cuts by the end of 2024. Before the employment data, the view was much more pessimistic, with forecast of just an adjustment in interest rates — and with part of the markets even ruling out changes in monetary policy.

In Brazil, the focus was on the pace of Selic reduction to be adopted by the Central Bank at its meeting this week. Meeting of the The Monetary Policy Committee will begin its two-day meeting this Tuesday to set interest rates.

The weekly Focus bulletin and interest rate futures contracts show the prospect of reducing the pace of the Selic cut to 0.25 percentage points. The majority of economists consulted in a Reuters survey also believe in a slowdown to 0.25 points, although a significant number believe in maintaining the 0.50 point step seen in the last six meetings.

Market also analyzes the scenario in Rio Grande do Sul. On Monday, the Chamber approved the Legislative Decree Project that declares a public calamity in the state and removes from the fiscal target the resources that will be used to recover the damage caused by the rains in the region.

Text goes to the Senate. The president of the Senate, Rodrigo Pacheco (PSD-MG), indicated today that the draft legislative decree that recognizes the state of calamity in Rio Grande do Sul must be approved. The legislative decree paves the way for the sending of federal resources to the state without this affecting the government’s fiscal target.

At the same time, investors evaluate some balance sheets such as Itaú Unibanco, Vamos, Embraer, TIM and Rede D’or. According to the XP team, the focus in the Stock Exchange session is on the earnings season, but also on the impacts of the rains in Rio Grande do Sul.

Itaú Unibanco rose around 2% after solid results in the first quarter. While Vamos, Rede D’Or and Vivara were also positive highlights after their respective balance sheets.