The dollar continues to decline against the real, in line with the moderate negative signal of the United States currency against its major counterparts and some currencies from emerging commodity-exporting countries.
In the spot market at 9:32 am on Wednesday, the dollar fell 0.22% to R$ 3.7093. The future dollar for February was down 0.12%, to R$ 3.7135.
The appetite for risky assets has persisted to date and builds on expectations that the United States and China have made headway in the recent trade talks in Beijing and after President Donald Trump has not declared a “national emergency” to resolve the deadlock in Congress on the construction of a wall on the Mexican border, as feared.
A Sino-American statement on trade is expected soon. In addition, information that China plans to expand infrastructure investments and the agricultural sector favors the real – since Brazil is a commodity exporter and China is its biggest buyer.
Internally, exchange traders already identify new dollar sales by exporters in the spot market, in the wake of the signs of advancement in the pension reform proposal. Some local agents may already be anticipating the sale of the currency in the face of the possibility of returning foreign investors, who have withdrawn seasonal resources but usually return to the local market earlier this year.
On Tuesday night, 8, Economy Minister Paulo Guedes confirmed that the provisional anti-fraud measure in social security and welfare benefits will be sent on Wednesday, Jan. 9th to President Jair Bolsonaro.
Guedes once again said that the tax effect of the measure should be between R $ 17 billion and R $ 20 billion per year – including 2019. He and the Minister of the Civil House, Onyx Lorenzoni, also confirmed that the proposed Pension reform should be sent to Congress – along with the creation of a new capitalization model – in February.
Lupin Rahman, executive vice president and global head of sovereign credit for emerging markets, Lupin Rahman, however, estimates that with the passage of the pension reform already priced, there is now a risk of adjustment, which can occur at any time.
On Tuesday, signs that the discussions on Social Security are moving forward boosted the Bovespa Index to its highest level of closing points in history (92,031.86 points), while the spot dollar closed at R $ 3.7174, a decrease of 0.47%.
For Rahman, “domestic investors are in a very bullish move in Brazil, while the foreigners are a bit more … they are not bearish, but they are seeing everything else that is happening on the globe.” In an interview with Broadcast, newspaper real-time Estado de S. Paulo’s, he says that “the sites are very, very bullish and I believe there may be a correction, which is negative for asset prices.”