Dollar reaches R$ 5.83 for the first time in history despite global economic tensions due to the spread of the coronavirus
At 12:10 pm this Thursday (7) the dolar was traded at R$ 5.8886, up 1.08%. Reaching the maximum of R$ 5.8616. Rising by seventh consecutive session.
The dollar (tourism) was traded around R$ 5.86, disregarding the IOF (Tax on Financial Operations) charge. Theafter the 7% drop in the previous session.
Covid-19 is turning the world upside down
The day before, the dollar closed up 1.10%, at R$ 5.8507, renewing a nominal closing record (without considering inflation). Reaching R$5.86 at the session high, to date the highest intraday nominal price ever recorded in the country. This month, the dollar accumulated a high of 3.36%. In 2020, it grew 10.75%
Coronavirus and global tension
Last Wednesday (7), the number of cases of the coronavirus pandemic increased, with one person even confirmed to have been infected in Brazil. Fears are growing over the impact of the virus on the economy.
“The impact of the coronavirus remains an unknown and a threat to the global economy,” Jefferson Rugik, from Correparti Corretora, summarized in a note, citing protective movements.
Due to the large flow of capital to lower-risk markets, the dollar continues to appreciate against other currencies around the world, especially against the currencies of emerging countries such as Brazil. It is also gaining strength against the Mexican and Chilean pesos, the Turkish lira, and the South African rand. In relation to strong currencies, it has seen a sharp drop of 0.28%. It has lost almost 0.5% against the yen, a sign of caution in the international arena.
Central Bank Strategy
In an attempt to limit the dollar's surge, the Central Bank held an extraordinary auction of up to 20,000 traditional swaps on the trading floor, maturing in August, October and December of this year, 2020.
“The market was already counting on this auction, so it was nothing new,” said economist Silvio Campos Neto. This limited the Central Bank’s ability to curb the US currency.
So, did you like it? Then leave your comment!
Source: G1 news