Home News Firefighters in action: dollar rises after Lira and Pacheco prioritize spending cuts

Firefighters in action: dollar rises after Lira and Pacheco prioritize spending cuts

5
0

Foto: Fatido/Getty Images

The dollar retreated against the real this Friday, giving back strong gains from earlier, but still above R$5.97, as the market reacted to comments from Congressional leaders about the government’s fiscal package and took profits due to the historically high levels of the currency.

At 1:03 pm, the dollar in cash fell 0.24%, to R$5.9768 on sale, after earlier reaching a record high of R$6.1148 (+2.07%).

On B3, the first-month dollar futures contract rose 0.76%, to R$6.055 on sale.

The market’s attention remained completely focused on domestic news, reacting to the government’s double announcement on Wednesday of a spending containment package and an Income Tax reform.

The fiscal package, which was expected by the market, came in line with expectations, but the IR reform, which expands the exemption range for those earning up to R$5,000 per month, took investors by surprise, raising more fears about the Executive’s commitment to the adjustment of public accounts.

READ MORE: Self-fulfilling prophecy: how the announcement of the tax package has already started to affect your life

After surpassing R$6.00 the day before for the first time since the Brazilian currency began circulating in 1994, the dollar rose again this session, with the market’s negative reaction continuing.

At the end of the morning, however, the North American currency began to return its gains, following comments from the president of the Chamber of Deputies, Arthur Lira (PP-AL), and the president of the Senate, Rodrigo Pacheco (PSD-MG ), in defense of the government package and fiscal balance.

In a publication in Home”.

He also said that “any other government initiative that involves foregoing revenue will only be addressed next year, and after a careful and, above all, realistic analysis of its financing sources”.

Pacheco, for his part, told journalists later that he supports the government’s fiscal package “with restrictions and the possibility of an increase” and that the IR reform should only be analyzed “further down the road”.

READ MORE: Instead of calming its creditors, the government pours gasoline on the class struggle

The speeches helped to ease the dollar exchange rate.

“After the explosive reaction to the government’s plan, there was a great movement of relief when Lira reinforced her commitment to the fiscal framework. He already had details about the spending cut plan, and his position today reaffirms the view that fiscal responsibility will be respected”, said Eduardo Moutinho, market analyst at Ebury Bank.

Another analyst interviewed by Reuters also drew attention to a profit-taking movement in this session, amid the historically high levels that the dollar was reaching.

Abroad, the dollar index – which measures the performance of the US currency against a basket of six currencies – fell 0.08%, to 105.980.

Source link

gnewsplus24.com

mojcasopis.sk