On a day marked by international tensions (September 21, 2022) the dollar interrupted the sequence of drops and went back up. The stock market fell, following the international market.

The commercial dollar closed this Wednesday (21) sold at R$ 5.173, with a high of R$ 0.021 (+0.4%). The quotation had a volatile day, alternating between highs and lows.

Around 3 pm, right after the Federal Reserve (Fed, the US central bank) announced a 0.75 percentage point hike in interest rates, the currency reached R$ 5.19, but slowed down near the end of trading.
This was the dollar’s first rise after two consecutive falls. The currency has accumulated a drop of 0.56% in September and 7.23% in 2022.

Despite the rise in the US currency today, the Brazilian real performed better than other currencies. The commercial Euro dropped 0.91% and closed at R$ 5.09, losing value against the US currency.

In the stock market, the day was also marked by volatility. The Ibovespa index, of the B3, closed at 111,936 points, down 0.52%.

The indicator alternated between highs and lows throughout the session, but started to fall in mid-afternoon influenced by the US stock markets, which closed strongly down after the Fed’s decision.

Despite the drop, Ibovespa performed better than the US stock markets. The Dow Jones index, of industrial companies, lost 1.7%.

The Nasdaq, of technology companies, retreated 1.79%. The S&P 500, of the 500 biggest companies, fell 1.71%.

The 0.75 percentage point increase in the basic U.S. interest rates was expected by the market, although some investors were betting on a rise of up to one point.

However, the harsh tone of the Fed statement indicated that interest rates in the United States may rise for longer than expected, which raised the dollar and made stock markets fall all over the planet.

In the Brazilian market, the pressure was relieved because, also today, the Monetary Policy Committee (Copom) will decide the new Selic rate (the economy’s basic interest rate).
As the interest rates are high, at 13.75% a year, this is easing the pressure for the flight of resources towards US Treasury bonds, considered the safest investments in the world and that become attractive with the increase in interest rates in the United States.