Dollar rises to R$5.76, highest value since 2021

This Tuesday (29), the dollar rose 0.92% and was sold at R$5.761, the highest since March 29, 2021. During the day, the American currency reached R$5.7671 at sale, being the biggest since 2020. At the end of the day, the tourism dollar closed at R$5.97.

The São Paulo stock exchange had fluctuations since opening, but began to fall in the early afternoon and closed lower. The IBOVESPA ended the day with a drop of 0.37%, reaching 130,729 points. The market became pessimistic after the Minister of Finance, Fernando Haddad, said that there are still many uncertainties about the future budget of the federal government.

Understand what happened

With market uncertainty about the government's contingency spending measures, the dollar rose in price, but caused the stock market to fall. In an interview held at the door of the Ministry of Finance on Tuesday (29), the minister Haddadstated that the cost containment package that must be presented by the government's economic area was still under analysis: “There’s no date yet and I wouldn’t call it a package.”

The minister was asked about the measures and whether they would involve a cut of R$30 billion to R$50 billion, and his final response was that he did not know where that number had come from. Haddad stated that President Luiz Inácio Lula da Silva requested more data on the proposals and the Treasury is providing all the information.

He did not anticipate what the measures would be, but indicated that they could be presented in the coming weeks through a Proposed Amendment to the Constitution (PEC).

_{Haddad not speaking out about spending cuts avoids internal leaks (Video: reproduction/CNN Brasil/YouTube)}

The lack of disclosure regarding expense cuts has stressed the market

The foreign exchange director at Ourominas, Elson Gusmão stated that “Internally, this lack of government announcement regarding the expected expense cuts after the elections is what has stressed the market”.

Ariane Benedito, co-founder and chief economist at Eai Invest adds that, due to the lack of confirmation from the minister regarding the date of the package, the negative flow of foreign capital left Brazil.

The possibility of Trump winning the elections contributed to the appreciation of the currency

The exchange rate has tended to rise around the world since the campaign for the presidency of the United States equalized, that is, the possibility of Donald Trump winning the elections has caused the currency to appreciate. This happens because the candidate has an economic policy proposal considered inflationary by experts and, as a result, the market predicts that if Trump wins office, American interest rates will tend to rise again.

Another factor that raised the price was the number of job openings in the USA. In September, the number of vacancies fell to 7.443 million according to the Department of Labor's Jolts report published on Tuesday.

Featured photo: American interest rates could rise again if Trump is elected (Reproduction/AFP/Luis Robayo/Getty Images Embed)