The reversal of the tax cut package in the UK brought the global market into a day of relief.
The dollar fell, following the recovery in appetite for higher risk among international investors. The stock market rose for the first time after five consecutive drops.
The commercial dollar closed this Monday (17) sold at R$ 5.303, with a retreat of R$ 0.02 (-0.37%).
The currency started the day at a strong low, falling to R$ 5.25 around 1 pm, but the fall lost strength, with the maintenance of concerns about interest rates in the United States.
With today’s performance, the North American currency falls 1.71% in October. In 2022, the currency accumulates a drop of 4.89%.
In the stock market, the day was marked by recovery. The Ibovespa index, of the B3, closed at 113,624 points, up 1.38%.
The indicator took advantage of the recovery mood in the international market and was also driven by a movement of investors who took advantage of recent falls in the stock market to buy shares.
The decision by the UK’s new finance minister, Jeremy Hunt, to reverse virtually all of the tax cuts announced three weeks ago by Prime Minister Liz Truss was well received by international investors.
With no quid pro quo to be funded, such as cuts in public spending or hikes in other taxes, the cuts would raise British public debt, which has caused tensions in the global market.
During the afternoon, however, fears were reignited that the Federal Reserve (Fed, the US central bank) will keep US interest rates high for longer than planned to hold down inflation in the United States.
Higher interest rates in advanced economies stimulate capital flight from emerging countries, such as Brazil. This has pressured the dollar against the real, but not enough to reverse the accumulated drop until early afternoon.