Dollar Closes July Higher, Ibovespa Advances 3%

The dollar ended July 2024 with a cumulative gain of 1.16%, closing at R$ 5.65, while its appreciation for the year is over 15%. During the month, the U.S. currency exhibited volatile behavior, influenced by both internal and external factors. According to Valor Econômico, pressure on the real was intensified by geopolitical tensions, especially the attack ordered by Iran against Israel, and by anticipation surrounding the meeting of the Central Bank's Monetary Policy Committee (Copom).

Additionally, the formation of the end-of-month Ptax contributed to exchange rate volatility, as this rate serves as a reference for the settlement of futures contracts. Fiscal uncertainty in Brazil also weighed on the real's performance, with investors concerned about the government's ability to maintain effective fiscal control amid a challenging economic scenario.

At the beginning of August, the dollar surged, reaching its highest level in over three years. On August 5th, the U.S. currency touched R$ 5.86, close to the historical high of March 2021, before ending the day up 1.29%, quoted at R$ 5.783 according to Valor Investe.

Projections for the dollar exchange rate vary significantly, with estimates ranging from R$ 5.40 to R$ 5.70. According to analysts at Estadão, the dollar is expected to remain under pressure in August, with relief only in September when the Fed is expected to begin a cycle of interest rate cuts.