MercoPress. South Atlantic News Agency

US Dollar climbs to R$ 5.05 in a Brazilian market hit by political turmoil

The US currency is still below January's rates despite political volatility

The US dollar was traded at R$ 5.05 apiece Friday amid Brazil's volatile context with President Jair Bolsonaro under investigation for alleged corruption and a mega request for his impeachment already in Congress.

However, employment figures from the US market have had a positive impact on Brazil's economy, according to analysts, which has helped prevent a deeper devaluation, as investors tend to have a more cautious approach to local disbursements.

The mood of the financial market was split between the political crisis and international optimism. At the end of the day, the real had slightly fallen 0.16% to 5.053 per US dollar, having swayed between 4.988 and 5.074.

But these figures meant a 2.3% weekly increase. Since January, the US dollar has nonetheless fallen 2.6%.

Oblivious to the political scenario, the Sao Paulo Ibovespa stock index rose Friday 1.56% to 127,621 points for an overall stable week, all things considered, with an increase of 0.28% against forecasts of a 0.64% drop. Since January, it has grown 7.22%.

The domestic political atmosphere was hit Friday when the Federal State Attorney's office asked the Supreme Court (STF) to open an inquiry against President Jair Bolsonaro for the alleged crime of malfeasance in the purchase of Covaxin vaccines.

STF Justice Rosa Weber denied the PGR's request for the investigation to be opened only after the Senate's committe known as CPI investigating Bolsonaro's handling of the pandemic has reached its conclusions.

According to analysts, the everchanging political scenario has been affecting investors' behavior.

Nevertheless, industrial production grew 1.4% in May, the first positive result in three months. Despite the good performance, the advance was not enough to erase the 4.7% retraction accumulated between February and April.

On the international stage, the US Department of Labor announced this Friday the creation of 850,000 urban jobs in June, above expectations of 706,000 jobs. Despite the positive result, the unemployment rate was 5.9%, while expectations pointed to 5.6%. Markets around the world analyze the results and possible impacts on US monetary policy. The main fear is that the signs of a more robust recovery make the Federal Reserver (Fed), the US Central Bank, review the stimulus strategy with the purchase of government bonds and the maintenance of interest rates at minimum levels.

These items also play a part in the xchange rate of the US dollar against all the other world currencies.