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Dollar falls! The US currency closed its seventh consecutive session down, trading at R$5,64, while the Ibovespa index soared! The Fed's decision to maintain interest rates in the US and expectations for the Copom meeting in Brazil are shaking up the markets. Find out how these movements affect your pocket and investments!
The dollar ended the session this Wednesday (19) with a drop of 0,43%, reaching R$5,64, the lowest value since October last year.
The Ibovespa, the main index of B3, advanced 0,79% and closed at 132.508 points, driven by decisions on interest rates in Brazil and the United States.
The market remains attentive to the movements of the Federal Reserve (Fed), the North American central bank, and the Monetary Policy Committee (Copom) of the Central Bank of Brazil, whose decisions directly influence the global economy and investments.
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Fed decision keeps US interest rates unchanged
The Fed announced that it would maintain interest rates between 4,25% and 4,50% per year, as expected by the market.
The positioning of the central bank The US government reflects a cautious strategy in the face of economic uncertainty, but indicates the possibility of two interest rate cuts this year, which could impact emerging markets such as Brazil.
The decision to keep interest rates high in the United States makes investments in developed countries more attractive, reducing demand for risky assets, such as those from emerging markets.
However, the market is already starting to price in a possible change in this monetary policy, which could have an impact on the dollar exchange rate and the performance of the Brazilian stock market in the coming months.
Expectations for Copom in Brazil
Also this Wednesday, after the markets close, Copom will release its decision on the Selic rate.
Analysts expect a 1 percentage point increase, raising the base interest rate to 14,25% per year, the highest level in almost 20 years.
This monetary tightening policy aims to contain inflation, but it can slow down economic activity by making credit more expensive and reducing consumption.
Impact on the financial market
With interest rates maintained in the United States and expectations of an increase in the Selic rate in Brazil, investors continue to adjust their strategies.
The dollar accumulated:
- Drop of 1,67% in the week
- 4,54% decline in the month
- Devaluation of 8,61% in the year
Ibovespa recorded the following performances:
- Up 2,75% in the week
- 7,91% increase in the month
- Gain of 10,16% in the year
Economic policies and perspectives
O government Brazilians closely follow the evolution of the economic scenario.
This Wednesday, the Secretariat of Economic Policy (SPE), of the Ministry of Finance, released the Macrofiscal Bulletin, with new projections for the growth of the Gross Domestic Product (GDP) and inflation.
The GDP growth estimate for this year remained at 2,3%, below the expansion recorded last year, which was 3,4%.
The projection for the Broad Consumer Price Index (IPCA), the main inflation indicator, rose from 4,8% to 4,9%, reflecting challenges in containing prices.
Global trade and tariff policies
Another factor that continues to influence markets is the United States' tariff policy.
The American President, Donald Trump, maintained some tariffs on imports, while others were temporarily suspended.
Experts warn that these tariffs could increase production costs, impact consumer prices and contribute to inflation in the US.
Furthermore, trade uncertainties affect investor confidence and could slow the global economy, harming emerging markets such as Brazil.
How do these decisions impact the consumer?
Interest rate settings in Brazil and the United States do not only affect large investors, but also the daily lives of consumers.
With high interest rates, credit becomes more expensive, making financing and installment purchases difficult.
Furthermore, the behavior of the dollar directly impacts the prices of imported products, such as electronics and fuel, which may become more expensive or cheaper depending on the exchange rate of the US currency.
Expectations for the coming months
The market will continue to monitor developments in monetary policies in Brazil and the United States.
The projection is that the Selic rate will remain high for a prolonged period, until inflation indicators show a more significant slowdown.
On the external scenario, investors await the Fed's next steps to understand how the North American central bank will adjust its policy in the face of the global economic slowdown.
As a result, fluctuations in exchange rates and the stock market are expected to continue in the coming months, as the market assimilates new information and reassesses risks and opportunities.
