The dollar opened the day’s trading up 0.5%, quoted at R $ 5.62. The appreciation of the American currency is close to 40% this year. In January, the price was close to R $ 4. Since the beginning of March, the escalation, due to the pandemic of the new coronavirus, which caused the Covid-19, and also due to internal political and economic instability, the exchange rate has already reached R $ 5.74, the nominal maximum, when inflation is not discounted.
In yet another sign of the strong volatility that affects financial markets around the world, Asian and European indices have opposite directions on Wednesday morning, 6, with each in the midst of a different expectation. On the eastern continent, exchanges closed broadly. The first reason is related to the possible reopening or loosening of social isolation, in countries like the United States, some in Europe and in the Pacific region itself. In Europe, on the other hand, the indices fall, almost in a generalized way, mainly due to fears regarding, precisely, the tensions between the United States and China, linked to the pandemic.
If, on the one hand, the investor tries to get excited about the first steps being taken in the United States and Europe to reopen their economies, on the other hand, the signs of weakness in activity in the Old Continent and very pessimistic forecasts are worrying. The European Union predicts that the eurozone’s Gross Domestic Product (GDP) will fall 7.7% this year, due to the coronavirus pandemic. Eurozone retail sales dropped 11.2% in March, at the margin, and above expectations, and orders from Germany’s industry plunged 15.6% in March compared to February. The composite PMIs of the eurozone and Germany, on the other hand, fell to historical lows, but still above the previous ones. And amid the tension between the US and China, the Asian power central bank today weakened the yuan’s parity rate against the dollar.
Over here, the market starts the day with news of a downgrade of the Brazilian rating perspective by Fitch to negative and approval by the Chamber of Deputies of the Senate bill that allocates R $ 125 billion in aid to the States, the Federal District and municipalities due to the pandemic.
Regarding Copom, the market expectation is again to cut Selic’s 50 basis points, to 3.25%. On Tuesday, 5, the former president of the Central Bank and currently chief strategist of the management company Rio Bravo, Gustavo Franco, said he was concerned about the possibility of deflation in Brazil, even with the interest rate close to zero, showing a environment in which monetary policy loses its effectiveness.
On the political radar follows former minister Sérgio Moro, who testified to the Federal Police admitted to having agreed to change Rio’s superintendency last year under pressure from President Jair Bolsonaro. According to Moro, Bolsonaro would have said to him: “Moro, you have 27 superintendencies (of the Federal Police), I want only one: that of Rio de Janeiro”. And Moro answered the president. The former minister also reported that he has nine pieces of evidence that would confirm his accusations of Bolsonaro’s ‘political interference’ in command of the corporation.
At 4:34 am (Brasília time), the barrel of WTI oil for June fell 0.73% at Nymex, at $ 24.38, while Brent for July rose 0.23% at ICE, at $ 31.04. / SILVANA ROCHA, LUCIANA XACIER, SERGIO CALDAS AND FELIPE SIQUEIRA
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