The spot dollar closed slightly higher this Friday (13), expanding the previous day’s gains, as investors continued to express fears about the country’s fiscal scenario, with a spot auction by the Central Bank reducing what was a increase of more than 1% in the US currency during the afternoon.
The spot dollar ended the day up 0.28%, quoted at R$6.0295. During the week, the United States currency lost 0.78%.
On B3, at 5:24 pm, the first maturity dollar futures contract rose 0.99%, to R$6.044 on sale.
In the first hours of trading of this session, the US currency fluctuated little, amid a relatively empty agenda in Brazil and abroad, with investors having just finished digesting all the economic events of the week.
But the mood in the foreign exchange market became more pessimistic in the early afternoon, as financial agents once again showed concern about the trajectory of public accounts, as they await the processing of the government’s fiscal package in Congress.
In this scenario, in which the fiscal issue is linked to political decisions, whether by the government or parliamentarians, the market seemed to be especially sensitive to any new news, including the hospitalization of President Luiz Inácio Lula da Silva.
“The market has already realized that processing the package will not be simple, especially with Lula’s absence from the coordination, and the measures could still be diluted… By the end of the year, there is no doubt that approval in Congress is crucial,” he said. Eduardo Moutinho, market analyst at Ebury Bank.
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Lula used his Instagram account this Friday (13) to publish a video in which he appears walking in a corridor at the Sírio-Libanês Hospital, in São Paulo, and said in a text in the same publication that he is “firm and strong” after to undergo emergency surgery to drain a skull hematoma.
In the text that accompanies the video in the publication, Lula also states that “soon” he will be “ready to return home and continue working and taking care of each Brazilian family”.
If, on the one hand, Lula’s absence from the coordination of the fiscal package raises fears about its approval, the stability of the president’s health overturns expectations created at the beginning of the week that he could stop seeking re-election in 2026, which could open space for a name more aligned with the market.
“The market understands that Lula’s presence is essential to garner votes and prevent the measures from being diluted. But taking a step back, the scenario for the next two years becomes less constructive,” said Moutinho.
“With inflation and high interest rates, the worst possible scenario for the start of a political campaign is created, and he has the public machine in his hands.”
Another reason for the dollar’s rise in the face of fiscal fears was high future interest rates. High risk premiums would be deterring foreign investors from entering the market.
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On the data front, the Central Bank reported that its Economic Activity Index (IBC-Br), a indicator of Gross Domestic Product (GDP), registered an increase of 0.1% in October compared to the previous month. The expectation in a Reuters survey was for a drop of 0.2%.
The dollar reached its highest price of the session at 2:33 pm, at R$6.0773 (+1.07%). The day’s low was reached at 9:02 am, at R$5.9813 (-0.52%).
With the US currency hovering around highs, the Central Bank announced the holding of a spot dollar auction in the afternoon, on the second consecutive day of exchange rate intervention.
The BC sold a total value of US$845 million in the cash auction. The city hall did not cite the reason for holding the auction, which immediately helped to contain the rise in the dollar in the session.
The day before, the BC had sold a total of 4 billion dollars in two line auctions, in which dollars are sold with a repurchase commitment.
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In the external scenario, investors are waiting for the Federal Reserve meeting next week, where there is an expectation of a 25 basis point cut in interest rates.
“Perhaps next week, the Fed meeting could have a greater influence on the exchange rate. Communication from (chair Jerome) Powell can influence market pricing”, said Moutinho.
The dollar index — which measures the US currency’s performance against a basket of six currencies — rose 0.03% to 106.990.
