The dollar opened this Monday lower against the real, after having closed the sixth at its highest value since May 2020, with investors waiting for developments in the meeting in Brasília between the Minister of Finance, Fernando Haddad, and President Luiz Inácio Lula da Silva, in the hope that it can bring news in the tax area.
At 9:35 am, the spot dollar fell 1.02%, to R$5.8102 on sale. On B3, the first-month dollar futures contract fell 0.91%, to R$5.8390.
On Sunday, the Ministry of Finance reported that Haddad had canceled, at the request of President Lula, a trip to Europe scheduled for this week, to dedicate himself “to domestic issues”.
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The main domestic issue is precisely the tax issue. After the second round of municipal elections, the market expects the government to announce cost containment measures as soon as possible, as promised by the economic team.
Lula’s agenda for this Monday foresees a meeting at 9 am with Haddad, together with the ministers of the Civil House, Rui Costa; of Foreign Affairs, Mauro Vieira; and the General Secretariat, Márcio Macêdo.
On Friday, amid distrust in the Lula government’s fiscal policy and fears of Republican Donald Trump’s eventual victory in the dispute with Democrat Kamala Harris in the USA, the dollar closed up 1.53%, at 5.8699 reais, highest value since May 13, 2020.
The simple fact that Haddad stayed in Brasília already opened space for a downward correction of the dollar and DI rates (Interbank Deposits), at least at the beginning of the session.
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This Monday also opens a week full of events with economic implications, in particular the North American presidential election, on Tuesday; the decision on interest rates by the Central Bank of Brazil, on Wednesday; and the Federal Reserve’s monetary policy announcement on Thursday.
Abroad contributed to the movement seen in Brazil, with the dollar falling against practically all other currencies and Treasury yields falling steadily at the beginning of the session. At 9:38 am, the dollar index — which measures the performance of the US currency against a basket of six currencies — fell 0.28%, to 103.650.
Abroad, the main focus is the North American election, with the Trump and Kamala campaigns seeking decisive votes in the seven states that will decide the dispute.
As usual, the Central Bank will auction up to 14,000 traditional currency swap contracts in this session for the purpose of rolling over the maturity date of December 2, 2024.
Earlier, the BC’s Focus report showed that the median market projections for the dollar at the end of 2024 went from 5.45 to 5.50 reais. The inflation projection this year went from 4.55% to 4.59% and for next year it went from 4.00% to 4.03% — in both cases above the center of the inflation target, of 3%.
