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Dollar hits R $ 5 and moves to 3rd week of losses with optimistic outlook

Posted by Marina

The dollar accelerated the fall by more than 2% against the real on Friday, moving closer to 5 reais and moving towards the end of the third consecutive week of losses amid an optimistic outlook, with investors reacting positively to better data than expected on employment in the United States.

At 10:10, the dollar was down 2.47%, to 5.0047 reais on the sale. At the minimum of the day, the US currency was 5.0010 reais.

The most liquid future dollar fell 2.29%, to 5.008 reais.

Friday marked the end of a positive week for risky assets, which have been driven by optimism about a resumption of activity in the main economies due to the gradual easing of restrictions. So far, the dollar has fallen 5.8% against the real since the close of last Friday.

Abroad, other risky currencies - such as the Mexican peso, the South African rand and the Australian dollar - were trading higher against the dollar in this trading session.

"Investors follow the disclosure of macroeconomic indicators, but remain focused on the reopening of economic activities in several countries," wrote Bradesco analysts.

On Friday, the US government's employment report showed that the unemployment rate in the world's largest economy dropped unexpectedly in May, from 14.7% in April to 13.3%, contrary to expectations of a high to 19.8% in a Reuters poll.

Market participants said the reading was much better than expected, a sign that the worst of the coronavirus economic crisis may be over.

"In addition, the announcement of the expansion of the monetary stimulus program made by the ECB yesterday still brings additional impetus to business", completed Bradesco analysts.

The European Central Bank approved a larger-than-expected expansion in its stimulus program on Thursday to boost its economies, expanding emergency asset purchases by 600 billion euros to 1.35 trillion euros.

Meanwhile, in Brazil, attention continued on political developments, with the expectation of possible social unrest for the weekend.

President Jair Bolsonaro again called protesters pro-democracy groups opposed to his government "fringe" and "terrorists" on Friday, and called on the country's security forces to take action against the demonstrations scheduled for Sunday if the groups "extrapolate" the limits.

Despite having lost strength since it touched record highs close to six reais in mid-May, the dollar still accumulates an increase of about 25% against the real in 2020, hampered by a scenario of political uncertainties, low and strong interest rates economic impacts caused by the coronavirus pandemic.

In the last session, the US spot currency rose 0.89% to 5.1315 reais on the sale.

This Friday, the Central Bank will offer up to 12,000 traditional currency swap contracts for rollover, with maturities divided between September 2020 and February 2021.

Source: Notícias Agrícolas