At the end of the day, the American currency was traded at R $ 5.6857, up 1.26%. This is the highest level since the closing of May 20, when the dollar was 5.6875.
Upon arriving at the Chamber, Maia said that the government base obstructs the votes due to the impasse in the formation of the Mixed Budget Committee (CMO) and said that he hopes that the votes on economic reforms will have “more interest” by the Executive. The congressman also said that it only makes sense to vote on the Budget after the PEC Emergency, with rules for cutting expenses and that, for that, it needs to cancel the January recess. “Otherwise, the Emergency PEC will only be voted in February and the Budget in March,” he commented.
“I hope that when the reforms arrive, we will have a majority in the House so that the dollar does not reach R $ 7,” he added.
The statements made by the mayor bring the fiscal issue and the short voting schedule back to the focus of the markets, topics that were put on the back burner by decision of President Jair Bolsonaro until the end of the elections. The matter also returns on the eve of the Copom interest decision. Although there is consensus for maintaining interest rates, there is an expectation that the communiqué will bring some message about the fiscal uncertainties that insist on staying on the horizon, as well as the surprises with inflation in recent weeks.
For TD Securities, tomorrow’s Copom decision should be neutral for the domestic exchange rate. “The real risk to the real is a negative spiral of fiscal risk that, in the last case, would compel the Central Bank to act on the short end of interest rates to stabilize the currency. Although we believe that the foreign exchange market prices such an event, the interest market appears to do so to some extent, ”says the Canadian bank in a report.
For Société Générale, the combination of negative real interest rates for a long time, the lack of momentum for reforms and the risk that the fiscal and debt trajectories will remain negative should keep the real under pressure in the coming quarters.
“On the external front, a second wave of covid-19 could undermine the global recovery and jeopardize the recovery in commodity prices, while a contested election in the United States could raise global risk aversion. Finally, any further deterioration in relations between the United States and China would negatively affect the appetite for Brazilian assets “, says SocGen.
The French bank works with a dollar projection at R $ 5.80 at the end of 2020 and reaching R $ 6.00 in the third quarter of 2021. The main factor for the recent dynamics, say the bank’s analysts, was the deterioration from the fiscal perspective.
“Although global conditions remain favorable, the real has faced a strong challenge from the worsening fiscal balance, public debt and falling interest rates. The real has devalued 29% this year and remains under pressure even in the face of a significant correction. current transactions “, they note.
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