The dollar started the week higher against the real, reacting to recent fiscal announcements by the Brazilian government and new commercial threats made by US President-elect Donald Trump. The US currency also strengthened on the global market, reflecting investor concerns about possible trade wars next year.
Dollar quotes
At 9:27 a.m. on Monday, the spot dollar rose 0.33%, quoted at 6.0210 reais for sale. In addition, on B3, the first-maturity dollar futures contract also rose 0.60%, trading at 6.037 reais.
Meanwhile, abroad, the dollar index — which measures the performance of the US currency against a basket of six currencies — rose 0.16%, reaching 106.210. On the other hand, the US currency appreciated especially against emerging market currencies, such as the Mexican peso, the South African rand and the Chilean peso.
International scenario: Trade tension
The strengthening of the dollar globally is also linked to Donald Trump's recent trade threats. For example, last Saturday, Trump demanded that BRICS member countries, including Brazil, not support the creation or adoption of a new alternative currency to the dollar. Otherwise, they could face trade tariffs of up to 100%.
Meanwhile, this statement comes amid growing debate over alternatives to the dollar. In addition, in October, President Luiz Inácio Lula da Silva advocated, during the BRICS meeting, the creation of means of payment that reduce dependence on the US currency in transactions between the countries of the bloc.
Economic data in the United States
Global markets are looking ahead to a busy week ahead of key economic indicators. Among them is the November U.S. employment report, due out on Friday, which could offer clues about the Federal Reserve's next steps on interest rates.
National scenario: Fiscal measures and market reaction
In Brazil, investors remain pessimistic about the government's commitment to fiscal adjustment. Last week, the Executive announced a spending cut package, estimated to save R$71.9 billion over two years, and an income tax reform. However, the simultaneous announcement of these measures was interpreted as a sign of a lack of commitment to fiscal responsibility.
On Friday, the negative repercussions drove a 0.17% rise in the spot dollar. The currency closed the session quoted at 6.0012 reais. This was the highest nominal value in history.
“It is difficult to predict how far the dollar can go, especially because, in my assessment, we are facing a disproportionate market response. At some point, we should see an adjustment,” said André Galhardo, economic consultant for the Remessa Online platform.
Economic projections: Inflation on the rise
The Focus survey, released this Monday by the Central Bank, indicated an increase in the IPCA projections for 2024, 2025 and 2026. The estimate for 2024 went from 4.63% to 4.71%, above the target ceiling. For 2025 and 2026, the projections rose to 4.40% and 3.81%, respectively.
Source: Fernando Cardoso | Notícias Agrícolas
