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For the first time in two weeks, the dollar closes below R$ 5.10

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The dollar is at its lowest price since the end of March, and the stock market, despite falling after three consecutive increases, closed with an accumulated increase of 12% for the week.

This Thursday (9), the commercial dollar closed with a drop of 1.02%, at R$ 5.091 on sale. This was the lowest closing value in almost two weeks, since March 26 with R$ 4.998. The Ibovespa, the main index of the Brazilian Stock Exchange, fell by 1.20%, to 77,681.94. But it closed the week with an accumulated increase of 12%.

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With investors' sentiment improving as pressure from the coronavirus eased, the dollar closed another day lower. This shift in the global pandemic landscape is causing assets considered to be at higher risk to appreciate, such as emerging market currencies. 

Dollar and Central Bank

The US dollar rose in the first few minutes of trading, but reversed course later in the morning. At its lowest point, around noon, the price reached R$ 5.05.

The Central Bank (BC) intervened in the market. The monetary authority did not sell dollars from its international reserves today, but chose to auction US$1,000,000 in foreign exchange swap contracts, equivalent to selling dollars on the futures market. So far this year, the commercial dollar has already risen by 26.851,000.

Oil

The stock market remained on the rise for most of the day, but reversed its trend after the Organization of the Petroleum Exporting Countries (OPEC) meeting ended. The countries reached an agreement to reduce global production by 10 million barrels per day in May and June. However, doubts about whether non-OPEC countries will also reduce production caused several foreign stock markets to fall.

The oil price war began about a month ago, when Russia and Saudi Arabia increased their production, even in the face of falling prices due to low demand caused by the pandemic. Last week, the price of a barrel of Brent crude oil reached nearly US$1.5 trillion (20 t/h), the lowest level in 18 years. According to Petrobras, oil extraction in the pre-salt layer only becomes viable at prices above US$1.5 trillion (45 t/h).

At around 6:30 PM, Brent was trading at US$$ 31.99, down 2.59%. Petrobras shares also fell. Common shares, which carry voting rights at shareholders' meetings, fell 3.66% today. Preferred shares, which have priority in dividend distribution, fell 2.89%.

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