What Chineses needs to know about Brazil? Exchange US$/R$ – Oct. 2017

//What Chineses needs to know about Brazil? Exchange US$/R$ – Oct. 2017

What Chineses needs to know about Brazil? Exchange US$/R$ – Oct. 2017

Economists know that one of the most complicated fundamentals of a country’s macroeconomics is the relationship of its currency to the dollar. That is because this link depends on internal and external factors. In the graph below the behavior of the last ten years, you can see this very well. However, to simplify the analysis, let us focus on one of the aspects that I consider to be most fundamental for the oscillations of this relation. It is the “Confidence of the economic agents” in the conduct of the politics and economy of a country.

We are currently in a sui generis situation in which, despite the government’s low popularity, the economy gives clear signs of economic recovery. As a result, the price drops because commercial agents no longer care about media information, often much more interested in their particular affairs or even public officials supported by opposition parties.

The proof of this is that investment flows are occurring due to the low price of assets, even with the drop in interest rates that always attract investors of the so-called smart capital. The market bets a price of US$ / R$ 3.20 for the end of the year, glimpsing something related to pension reform that will significantly improve public accounts.

By | 2017-11-20T15:52:08+00:00 novembro 9th, 2017|Quick News Brazil|0 Comments