The dollar was back to BRL 4.40, exchanging hands last Friday at BRL 4.4090. But it failed to sustain this level of performance, pressured by bad numbers in the United States and the perception that the US economy is not immune to the negative effects of coronavirus. In the middle of the afternoon last Friday the dollar was sold at BRL 4.3830. Despite the drop, from the beginning of the year until now the US currency has accumulated a gain of 9.2% against the real.
The forex market must continue to monitor the evolution of the virus and its effects on the world economic scenario. The dollar index hit 99.98, but ended up falling to 99.34 points. Internally, still weak signs from the Brazilian economy, the impasse between government and Congress, and the ‘Guedes’ effect’ helped strengthen the dollar.
The market reflects the downward revision in the projections for the Brazilian economy in 2020, with old floors turning into ceilings for the national GDP. Signs of a slower growth associated with interest rates at historic low levels, stimulating the outflow of capital (interest rate arbitrage), play against the real and in favor of the dollar.
