The dollar is trading higher on Monday (02/03), following the movement of other emerging market currencies, while investors react with concern to the new trade tariffs imposed by the President of the United States, Donald Trump, about Canada, Mexico and China.
At 9:20 am, the spot dollar rose 0.54%, trading at R$ 5.8669. At B3, the first maturity futures contract rose 0.58%, quoted at R$ 5.910.
Last Friday, the US currency closed trading down 0.30%, at R$ 5.8355, the lowest price since November 26 last year. Despite the recent decline, the dollar has maintained an upward trend, not closing a single day in the red since January 17.
US tariffs put pressure on markets, boost dollar
Fulfilling campaign promises, Donald Trump announced over the weekend new tariffs of 25% on products from Mexico and Canada and 10% on imports from China. The measure generated immediate reactions, with announcements of trade retaliation by the affected countries and growing fears of a wider trade conflict.
Additionally, Trump has indicated that he may soon implement tariffs on EU goods. The new tariffs will take effect on Tuesday.
Although Trump is scheduled to meet with the leaders of Canada and Mexico on Monday, he has played down the possibility of changing his stance on the tariffs.
Impacts on emerging markets and investor reaction
Experts have been warning that trade tariffs imposed by the US could have negative effects on emerging economies, directly impacting the dollar's exchange rate. The increase in tariffs raises Treasury yields, strengthening the dollar and making emerging market assets less attractive to investors.
Furthermore, a prolonged trade war could weaken strategic markets such as China and the European Union, reducing demand for commodities and affecting the growth of countries such as Brazil.
“These tariffs are the main factor supporting prices. Consequently, the market’s initial expectation is inflationary pressure in the short term, which also contributes to higher prices,” said Bruno Cordeiro, Market Intelligence analyst at StoneX.
In this scenario, the dollar also appreciated strongly against currencies such as the Mexican peso, the South African rand and the Chilean peso.
Economic agenda and inflation projections
On Monday's economic calendar, investors will be monitoring data on industrial activity in Brazil. The figures will be released at 10 am. In addition, they will also be monitoring economic indicators from the United States, which are scheduled for 11:45 am and 12 pm.
In addition, the Focus report, released by the Central Bank this morning, pointed to higher inflation expectations for 2025 and 2026. The projection for the IPCA rose to 5.51% by the end of this year, compared to 5.50% the previous week, marking the 16th consecutive week of upward revision. For 2026, the estimate was adjusted to 4.28%, compared to 4.22% in the last survey.
The Central Bank maintains the inflation target at 3%, with a tolerance margin of 1.5 percentage points up or down.
Source: Fernando Cardoso | Notícias Agrícolas
