Thursday, March 23, 2017

Dollar closes at high compared with fiscal concerns after Government change pension reform

The dollar closed Wednesday in mild high before the real, with investors reacting to the concession made by the Government on pension reform, which fueled concerns that could undermine the country''s fiscal adjustment. The movement, however, was softened by timely flow of sale and the decline in American currency abroad. The dollar advanced 0,18%, real 3.0957 on sale, after hitting 3.1106 in the day''s maximum future dollar climbed about of 0,20%. "It''s still a timid movement (of the dollar)," said the Director of the Bureau of the broker''s Multi-Money Exchange, Durval Correa, adding that, if further there''s even greater distortion of the pension reform, the scenario may be high more intense American currency. The day before, the President Michel Temer announced that only federal civil servants will be affected by the changes provided for in the pension reform, leaving out State and servers of municipalities, in an attempt to facilitate the course of reform in Congress. This reform is considered by economic agents as crucial for the country to put its public finances in order and thus pick up movement of sustained economic growth. The market also continued to monitor the unfolding of operation weak flesh, which may affect the brazilian trade balance, since many countries have announced the temporary interruption of product purchases. This morning, it was the turn of South Africa, which has suspended imports of meat establishments suspected of involvement in fraud in Brazil. The stronger dollar advance, however, ended up attracting timely flow of sale when the level of 3.10 reais. The high movement was also partly contained in this session by the foreign market, where the dollar fell against some currencies of emerging countries, as the Mexican peso, and also on a basket of currencies. The Brazilian Central Bank sold fully in this session the batch of up to 10000 traditional swaps--equivalent to the future sale of dollars--offered for scrolling the April contracts. Have been five auctions alike, that reduced the 7.211 billion stock that WINS next month.
Reuters - 22/03/2017 News Item translated automatically
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