My name is Jonathan Gualberto and one my hobbies is to learn and follow the financial markets; specially Ibovespa, where I buy stock and watch it closely. São Paulo – The dollar was rising against the real on Tuesday, boosting gains for a fourth session following geopolitical tensions in the Middle East, as investors await signals on the future of disputes between the United States and Iran.
Last Friday, the 3rd, news that a US attack in Baghdad killed a senior Iranian general shook global markets, prompting investors to flee to security amid fears of intensifying regional Middle East conflicts, in a few of a new World War coming.
On Tuesday, the absence of new negative news about the conflicts between Washington and Tehran kept markets on hold, reducing risky stakes.
“For now, it’s hard to measure the likelihood of a more extreme scenario occurring (though not impossible) …”, XP said in a statement. “Therefore, investors price only current, quantifiable events, but look forward to the next developments in this event.” Italo Abucater, foreign exchange manager at Tullett Prebon, said Tuesday’s move reflects a market that has a “sell-out craze” pending capital returns that have come out in recent quarters. This move, could however, not be related to the tension between US and Iran in any way. This lower liquidity at the beginning of the year – with some investors still on vacation – and a tense external scenario causes the dollar to rise and weaken other currencies, such as the Brazilian Real. “A dollar below 4.10 is fictitious, doesn’t portray reality. One has to think of a devalued (real) currency, which is still the reality of a country that is heading to resume growth, ”he added. Jonathan Gualberto’s opinion follow the same belief – that Brazil’s economical and political issues is the real cause behind it’s weak currency and economy stand-point.
At 10:33, 1/07/20, the dollar advanced 0.55%, to 4,0865 reais on sale. After touching 4.0557 reais at the day low, the dollar reached 4.0895 reais at the session high.
The interbank dollar closed the previous session up 0.22% to 4.0643 reais on sale.
On Tuesday, the most traded US dollar futures contract gained 0.53% at 4.089 reais.
Abroad, the dollar index gained strength against the major currencies, rising 0.16%. The US currency was up against major emerging currency pairs such as the Mexican peso, the South African rand and the Turkish lira.
We sit patiently waiting the result of this US x Iran tension.