The dollar hits a new closing record and is trading at R$ 4.35 this Tuesday (18). Following the appreciation of stable currencies abroad, amid fears about the economic impact of the coronavirus outbreak.
At the end of the session, the US currency rose to R$ 4.3568, which means a growth of 0.64%. Before that, the highest price had occurred on Wednesday (12), when the dollar reached R$ 4.3505. At the session's high, it reached R$ 4.3613.
The US currency is up 1.68% for the month and is already up 8.65% for the year.
The currency's rise was fueled by fears over the spread of the coronavirus. The issue returned to the spotlight after Apple warned it would be unable to meet its revenue targets for the January-March period due to the virus.
"At the beginning of the year, there was optimism, and forecasts for Brazil's economic growth were above 2%. As the year progressed, forecasts had to be significantly reduced," You-Na Park-Heger, a currency strategist at Commerzbank, told Reuters.
For her, the market will continue to focus on the data in the coming weeks and the indicators “would need to be very positive to contain speculation about further monetary easing.”
The successive reduction in the Selic rate since July 2019 has narrowed the interest rate differential between Brazil and other emerging market peers, which could make investment in the country less attractive to foreigners and generate an outflow of dollars. This would boost the currency's exchange rate.
Perspectives
The Brazilian market maintained its forecast for the Selic rate at the end of 2020 at 4.25% per year, according to a Focus survey released this Monday. Currently, the interest rate is already at this level.
The market forecast for GDP growth in 2020 was reduced to 2.23%. The projection for the exchange rate at the end of 2020 remained at R$ 4.10 per dollar. For the end of 2021, it rose from R$ 4.10 to R$ 4.11 per dollar.