Dollar Soars: Understand the Reasons Behind the Surge of the American Currency!

Written by Alisson Ficher

Published on 19/06/2024 at 01:20

Updated on 19/06/2024 at 01:21

Dólar dispara acima de R$ 5,40 devido a juros altos nos EUA e incertezas fiscais no Brasil, afastando investidores e pressionando inflação. (Imagem: reprodução)

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The Dollar Continues to Trend Upward, Surpassing the Mark of R$ 5.40 in Recent Weeks. This Movement Is Not Random and Has Brought Bad Consequences for Brazilians, Such as the Increase in Inflation and, Consequently, in the Price of Numerous Products.

According to specialists, this increase has been driven by two main factors. The first is the restrictive monetary policy in the United States and the second are the fiscal uncertainties currently experienced in Brazil.

Restrictive Monetary Policy in the United States

In the United States, the monetary policy remains focused on containing inflation and strengthening the American economy, which is currently robust, with a strong labor market and available income for the population. There, interest rates are high, between 5.25% and 5.50% per year.

According to the G1 portal, specialists point out that the current context, combined with the expectation that American interest rates will only start to decline in the last quarter of 2024, makes the country’s public securities more attractive to investors.

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Fiscal Uncertainties in Brazil

The fiscal risk in Brazil intensifies, generating market distrust in the government’s ability to reduce expenditures and meet fiscal targets.

This uncertainty is caused by the change in the fiscal target for 2025, from surplus to zero deficit, which discourages foreign investments and puts pressure on the real.

This caution regarding the Brazilian fiscal scenario also impacts expectations for the Selic rate, the basic interest rate of the economy.

Analysts, also according to the cited site, predict that the Central Bank of Brazil (BC) will maintain the Selic at 10.50% per year in the next meeting of the Monetary Policy Committee (Copom), scheduled for June 19.

Perspectives for Inflation in Brazil

This perspective, combined with the deterioration of the fiscal framework, reduces investment projections in production in the country. These factors lead to an increase in inflation.

High interest rates, the depreciation of the real, and the slowdown of investments, combined with climatic problems affecting agricultural harvests, create a favorable environment for the increase in inflation in the coming months.

For specialists, this scenario requires consistent measures from the Brazilian government to restore investor confidence, contain inflation, and boost economic growth.

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Dollar Soars: Understand the Reasons Behind the Surge of the American Currency!

The Dollar Continues to Trend Upward, Surpassing the Mark of R$ 5.40 in Recent Weeks. This Movement Is Not Random and Has Brought Bad Consequences for Brazilians, Such as the Increase in Inflation and, Consequently, in the Price of Numerous Products.

Restrictive Monetary Policy in the United States

Fiscal Uncertainties in Brazil

Perspectives for Inflation in Brazil

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Dollar Soars: Understand the Reasons Behind the Surge of the American Currency!

The Dollar Continues to Trend Upward, Surpassing the Mark of R$ 5.40 in Recent Weeks. This Movement Is Not Random and Has Brought Bad Consequences for Brazilians, Such as the Increase in Inflation and, Consequently, in the Price of Numerous Products.

Restrictive Monetary Policy in the United States

Fiscal Uncertainties in Brazil

Perspectives for Inflation in Brazil

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