Dollar falls and seeks stabilization around BRL 4.10

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Signs of a resumption of local activity and news of improved rating of Brazil by S&P from BB- to BB+ weakened the dollar against the real. But undoubtedly the expectation, confirmed on Friday, of a partial trade agreement between the United States and China is that marked the appreciation of the local currency against the dollar, which closed Friday at BRL 4.1090 on the sell rate, accumulating losses of 0.89% over the week.

Even with the partial agreement, the market is still somewhat risk averse. The agreement provides for a tariff reduction, which means much more a truce in the trade war than a broad trade document. In any case, the picture is more positive and must influence markets, especially in Brazil.

This week, the last full one before year-end celebrations, the focus of the market must be the minutes of the Monetary Policy Committee (Copom). The document may offer more clues about the behavior of the Central Bank in 2020. The market will also keep an eye on the press conference of the chairman of the monetary body, Roberto Campos Neto. The Copom is expected to reinforce the previous message that interest rates will be set depending on the evolution of the economic scenario, especially inflation. Some traders still see room for an additional cut by 25 points in the Selic rate in 2020. Today the Selic is at 4.5% a year.